SMM Nickel Market Morning Comment (Sep 23)

Last week, nickel prices fluctuated upward, mainly due to macro boosts. Macro front, after the US Fed cut interest rates by 50 basis points, combined with Fed Chairman Powell's remarks about the risk reduction of a US economic recession, short-term market risk appetite increased, leading to a fluctuation upward in nickel prices. Fundamentally, the current main speculation point remains on nickel ore. The approval of Indonesia's RKAB is still pending, but with market expectations for increased nickel ore supply, the enthusiasm for purchasing Philippine ore has declined. This indirectly reflects that current market concerns about tight nickel ore supply from Indonesia have eased compared to before. From the overall supply and demand of primary nickel, the September-October peak season for NEVs and traditional stainless steel industries did not meet expectations, causing upstream raw material prices, including NPI and nickel salts, to continue to decline. In the upstream intermediate products sector, the continuous production and release of hydrometallurgical and pyrometallurgical intermediate products have exacerbated the oversupply. Given the unfavorable fundamentals, nickel prices may face upward pressure. In the short term, while nickel prices are boosted by macro factors to fluctuate upward, the weak fundamentals suggest caution against the risk of nickel prices declining. It is expected that SHFE nickel will operate in the range of 122,000-127,000 yuan/mt this week.