[SMM Nickel Midday Review] On May 13, nickel prices pulled back to the level of last week, with China and the US suspending the 24% retaliatory tariffs

SMM Nickel News on May 13:

Macro News:

(1) A spokesperson from the Ministry of Commerce (MOFCOM) made a statement regarding the joint statement on the China-US Geneva Economic and Trade Talks. MOFCOM stated that substantial progress was achieved in the high-level economic and trade talks between China and the US, with a significant reduction in bilateral tariff levels. The US has removed a total of 91% of the tariff hikes, and China has correspondingly removed 91% of its retaliatory tariffs. The US has suspended the implementation of 24% of the "reciprocal tariffs," and China has also suspended the implementation of 24% of its retaliatory tariffs.

(2) Following the joint statement released by China and the US on Monday to ease trade tensions, major Wall Street banks and traders in the interest rate market have reduced their bets on the US Fed's interest rate cuts within the year. Currently, they are only pricing in two interest rate cuts for 2025, with a significant delay in the expected timing of the next cut. The latest interest rate swap contracts tracking expectations for the US Fed's meetings indicate that the Fed may only cut interest rates by about 55 basis points this year, a further significant decline from the 75 basis points bet on last Friday. Traders also expect the first interest rate cut to occur in September.

Spot Market:

Today, the SMM 1# refined nickel price is 123,550-126,350 yuan/mt, with an average price of 124,950 yuan/mt, a decrease of 2,275 yuan/mt from the previous trading day. The quotation range for the mainstream spot premiums of Jinchuan No.1 nickel is 2,100-2,300 yuan/mt, with an average premium of 2,200 yuan/mt, an increase of 50 yuan/mt from the previous trading day. The quotation range for premiums and discounts of Russian nickel is 0-300 yuan/mt, with an average premium of 150 yuan/mt, unchanged from the previous trading day.

Futures Market:

The most-traded SHFE nickel contract (NI2506) opened lower in the night session yesterday and continued to decline, with the daytime session extending the slow decline trend and prices continuously falling, returning to the level before Monday's rally. As of 11:30, the closing price was 123,230 yuan/mt, a drop of 2.02%.

Today, nickel prices have pulled back to last week's levels. The positive developments regarding tariff issues between China and the US have been realized, and the impact of rumors about a ban on mining in the Philippines on nickel prices has been limited. Currently, nickel prices are still constrained by the surplus situation. Subsequent attention should be paid to the driving effect of the reduction in China-US tariffs on downstream demand.