US Dollar Index Rebounds, SHFE Nickel Trades Within Range [Institutional Commentary]

On Tuesday, nickel prices fluctuated. The most-traded SHFE nickel contract closed at 1,252,000 yuan/mt, up 0.75% from the previous day, while the most-traded LME nickel contract closed at $15,595/mt, up 0.39% from the previous day.

Macro-wise, Trump's tariff policies are gradually being implemented, and the final outcomes and their economic impacts remain to be seen. From the US Fed's stance, Powell indicated that interest rate cuts would be considered only after the situation becomes clearer, suggesting that with no significant weakening in the US economy's "hard data," short-term concerns may lean more towards inflation rather than recession risks. Additionally, Trump stated yesterday that he has no intention of firing Powell, leading to a significant rise in the US dollar index.

From the current fundamentals of nickel, the supply-demand imbalance remains unchanged. Recently, as the price center of nickel iron continues to decline, downstream psychological price levels for nickel have also decreased, with spot cargo transactions remaining sluggish. Cost side, the latest PNBP policy by the Indonesian government, tentatively set to take effect on the 26th, has pushed up nickel ore costs, but the price increase was already reflected in early April, limiting its short-term impact on prices. Looking ahead, with sluggish raw material procurement by stainless steel mills and short-term pressure on nickel iron prices, intermediate product production schedules are expected to increase in May, putting downward pressure on nickel prices. Therefore, we recommend considering short positions at opportune highs. Today, the price range for the most-traded SHFE nickel contract is expected to be 1,200,000-1,300,000 yuan/mt, while the LME nickel 3M contract is expected to range between $15,000-$16,300/mt.