SMM Nickel Market Morning Comment (Dec 20)

Spot Premiums/Discounts: The mainstream spot premiums for Jinchuan #1 nickel were 3,800-4,000 yuan/mt, with an average of 3,900 yuan/mt, down 300 yuan/mt compared to the previous trading day. The spot premiums for Norilsk nickel were -200-0 yuan/mt, with an average of -100 yuan/mt, unchanged from the previous trading day.

Futures Market: On December 19, influenced by the US Fed's statement during the night session indicating "cautious interest rate cuts ahead," SHFE nickel fell again from the night session to the morning. The midday closing price dropped by 1,320 yuan/mt to 122,930 yuan/mt, a decline of 1.06%. The early morning average price of SMM 1# refined nickel fell by 1,325 yuan/mt to 124,900 yuan/mt.

Spot Market: The fundamentals remained bearish with no structural changes. Although the decline in futures prices slightly boosted downstream purchase willingness, the overall demand in December continued to be relatively sluggish.

Spot Premiums/Discounts: Due to the sentiment of supply tightening for Jinchuan-branded nickel plates recently, year-end premiums continued to rise, breaking through 4,000 yuan/mt the day before yesterday to reach an annual high. However, in the past two days, a certain amount of Jinchuan-branded exported nickel plates has been re-imported and gradually flowed into the spot market for pre-sale, alleviating the sentiment of short-term supply tightness for Jinchuan nickel plates. It is expected that the spot premiums for nickel plates may pull back in the future.

Price Spread with Nickel Sulphate: Nickel briquette prices were in the range of 122,300-122,800 yuan/mt, down 1,175 yuan/mt compared to the previous trading day.