Recently, developments in global macroeconomic and geopolitical landscapes have had a significant impact on commodity markets, particularly the nickel market. Two major events—the decline in the US CPI data and Russia’s potential commodity export restriction policy—have become focal points for the market.
Positive Signal from the US CPI Data
According to the latest data, the US Consumer Price Index (CPI) for August advanced 2.5% YoY, down from the previous 2.9%. This suggests that the rate of inflation in the US is slowing down, a positive sign for the economic health. Notably, this deceleration has continued for five months, possibly indicating that the US Fed's monetary policies (such as interest rate hikes) are gradually achieving their intended effect, easing market concerns about an economic recession. The slowdown in inflation not only benefits the US economy but also helps boost confidence in global markets. A revival in macro sentiment typically drives up commodity demand, as increased economic activity stimulates the use of basic raw materials like metals and energy. Nickel, as a key industrial metal widely used in the manufacturing of stainless steel, batteries, and electronic products, sees its demand closely tied to global economic recovery.
The Potential Threat of Russia’s Export Restriction Policy
On the other hand, geopolitical risks have resurfaced. Russian President Vladimir Putin has suggested considering restrictions on the export of commodities such as nickel, titanium, and uranium as a response to Western sanctions. If implemented, this policy would have a significant impact on the global commodity market. Especially for nickel, one of Russia’s major export products, any export restriction measures could cause market turbulence. If the restrictions target specific nickel products, such as nickel ore or nickel intermediates (like FeNi and NPI), the impact on the global nickel industry might be relatively limited. However, if refined nickel is involved, the impact could be magnified. According to data, Russia’s export volume of refined nickel constitutes an important portion of its total production. In the spot market, restricting nickel exports might lead to excess nickel products in the domestic market of Russia, prompting enterprises to cut production. However, given that the global nickel market is still in a state of oversupply and considering the continuous commissioning of Chinese electro-deposited nickel projects, the actual impact on the supply side might be mitigated. In the futures market, the active registration of new electro-deposited nickel brands in China for warrant delivery eligibility, coupled with global overcapacity, further weakens the impact of Russian nickel export restrictions on LME and SHFE inventories. Therefore, SMM believes that market movements might be more driven by sentiment.
Market Sentiment and Subsequent Attention
Data shows that in H1 2024, Russia's nickel export volume has already declined YoY, indicating that the potential export restriction policy has been partially priced in by the market. This could be due to various factors, such as changes in market demand, rising production costs, or increased domestic consumption. Although specific restriction policies have not yet been enacted, the market has already reacted, and short-term sentiment volatility is inevitable.
In summary, the decline in US CPI data provides positive signals for the global economic health, while Russia’s potential export restriction policy brings uncertainty to the commodity market. Both developments require continuous attention to more accurately assess their impact on the global economy and the nickel market.
