[SMM Nickel Midday Review] On May 21, nickel prices continued to fluctuate rangebound. The latest intelligence from the US indicated that Israel was preparing to attack Iran's nuclear facilities.

SMM Nickel News on May 21:

Macro News:

(1) On May 20, the National Development and Reform Commission (NDRC) held its May press conference. Li Chao, Deputy Director of the Policy Research Office and spokesperson of the NDRC, stated that currently, China's economy is in a period of replacing old growth drivers with new ones, with new industries, business formats, and models emerging in competition, and traditional industries accelerating their transformation and upgrading. During this process, some industries have indeed encountered structural issues, with some blindly following investment trends and others failing to keep up with the pace of technological updates. Some enterprises have become embroiled in "cut-throat competition," with some selling at low, ultra-low, or even below-cost prices, and others engaging in counterfeiting and selling substandard goods. These practices have breached the boundaries and bottom lines of market competition, distorted market mechanisms, and disrupted the order of fair competition, necessitating rectification.

(2) According to CNN, multiple US officials have stated that the US has obtained new intelligence indicating that Israel is preparing to attack Iran's nuclear facilities. US officials have said that such an attack would represent a blatant break with President Trump and could trigger a broader regional conflict in the Middle East—a conflict that the US has been trying to avoid since tensions escalated following the 2023 Gaza war. Officials have warned that it is unclear whether Israeli leaders have made a final decision, and in fact, there are serious divisions within the US government over the likelihood of Israel ultimately taking action. Whether and how Israel attacks Iran may depend on its perception of US-Iran nuclear negotiations.

Spot Market:

Today, the SMM 1# refined nickel price is 123,400-125,650 yuan/mt, with an average price of 124,525 yuan/mt, a decrease of 50 yuan/mt from the previous trading day. The mainstream spot premium quotation range for Jinchuan #1 refined nickel is 2,000-2,200 yuan/mt, with an average premium of 2,100 yuan/mt, a decrease 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) opened slightly lower in the morning session and then maintained a fluctuating trend. By 11:30, the closing price was 123,120 yuan/mt, down 0.23%. In terms of inventory, as of May 20, LME nickel inventory increased by 90 mt to 202,098 mt on a single-day basis.

Currently, nickel prices are primarily influenced by "intensified policy disruptions and deepening 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. In the medium and long term, the trend is expected to be weak.