[SMM Nickel Midday Review] On May 20, nickel prices dropped slightly, with Atlanta Fed President Bostic reiterating his preference for only one interest rate cut this year

SMM Nickel News on May 19:

Macro News:

(1) Atlanta Fed President Bostic reiterated his preference for only one interest rate cut this year; New York Fed President Williams stated that recent economic data has been very good, and the key word for the economy is uncertainty; US Fed Vice Chair Jefferson said that the downgrade of the US credit rating by Moody's would be treated as general data for policy formulation; Dallas Fed President Logan suggested that the Fed should consider strengthening mechanisms to more effectively prevent money market interest rates from surging during market stress.

According to the CME "FedWatch Tool," the probability of the Fed maintaining interest rates unchanged in June is 91.6%, with only an 8.64% chance of a 25-basis-point rate cut; the probability of the Fed maintaining interest rates unchanged in July is 65.1%, with a 32.5% chance of a cumulative 25-basis-point rate cut and a 2.4% chance of a cumulative 50-basis-point rate cut.

(2) Putin stated that Russia is ready to cooperate with Ukraine on a memorandum for peace talks. Trump indicated that Russia and Ukraine would immediately commence negotiations to achieve a ceasefire. Zelenskyy expressed willingness to sign a memorandum with Russia for a ceasefire, in line with Putin's statement. The Kremlin stated that the leaders of Russia and the US intend to arrange a face-to-face meeting in the future, without setting a timetable for a ceasefire between Russia and Ukraine.

Spot Market:

Today, the SMM #1 refined nickel price is 123,350-125,800 yuan/mt, with an average price of 124,575 yuan/mt, a decrease of 425 yuan/mt from the previous trading day. The mainstream spot premium quotation range for Jinchuan #1 refined nickel is 2,000-2,300 yuan/mt, with an average premium of 2,150 yuan/mt, an increase of 50 yuan/mt from the previous trading day. The premium and discount quotation range for Russian nickel is 100-300 yuan/mt, with an average premium of 200 yuan/mt, unchanged from the previous trading day.

Futures Market:

The most-traded SHFE nickel contract (NI2506) maintained a fluctuating trend after opening lower in the night session yesterday, closing at 123,400 yuan/mt as of 11:30, down 0.40%. In terms of inventory, as of May 16, LME nickel inventory decreased by 3,924 mt to 195,222 mt on the day, while domestic SHFE inventory decreased by 66 mt to 27,742 mt.

Currently, nickel prices are primarily influenced by "intensified policy disruptions and deepened supply-demand imbalance," maintaining a fluctuating pattern in the short term, with a support level at 122,000 yuan/mt and a resistance level at 128,000 yuan/mt; the medium and long-term trend is weak.