[SMM Nickel Midday Review] Nickel prices continued to decline on May 27, with profits of industrial enterprises above designated size nationwide up 3.0% YoY in April

SMM Nickel News on May 23:

Macro News:

(1) Yu Weining, a statistician from the Industrial Statistics Department of the National Bureau of Statistics (NBS), stated that the profit growth of industrial enterprises accelerated. From January to April, the profits of industrial enterprises above designated size increased by 1.4%, accelerating by 0.6 percentage points compared to the January-March period, continuing the trend of recovery and improvement. By industry, among the 41 major industrial sectors, 23 sectors saw year-on-year profit growth, accounting for nearly 60% of the total. In April, the profits of industrial enterprises above designated size nationwide increased by 3.0% year-on-year, accelerating by 0.4 percentage points compared to March.

(2) On May 26, Moody's Investors Service released a report, deciding to maintain China's sovereign credit rating at "A1" and its negative outlook unchanged. Relevant officials from the Ministry of Finance stated that since the fourth quarter of last year, the Chinese government has implemented a package of macroeconomic regulatory policies, leading to a recovery and improvement in economic indicators, stable market expectations and confidence, and enhanced medium- and long-term debt sustainability. Moody's decision to maintain China's sovereign credit rating stable is a positive reflection of China's promising economic outlook.

Spot Market:

Today, the SMM #1 refined nickel price is 122,150-124,450 yuan/mt, with an average price of 123,300 yuan/mt, down 850 yuan/mt from the previous trading day. The mainstream spot premium quotation range for Jinchuan #1 refined nickel is 2,100-2,300 yuan/mt, with an average premium of 2,200 yuan/mt, unchanged from the previous trading day. The premiums and discounts quotation range for Russian nickel is 100-400 yuan/mt, with an average premium of 250 yuan/mt, unchanged from the previous trading day.

Futures Market:

The most-traded SHFE nickel contract (NI2507) fluctuated downward, with prices continuously declining in the morning session, hitting a low of 122,150 yuan/mt, before rebounding slightly. As of 11:30, the closing price was 122,550 yuan/mt, down 0.38%. In terms of inventory, as of May 23, LME nickel inventory decreased by 2,274 mt to 198,636 mt on a single-day basis, while SMM refined nickel social inventory across six locations decreased by 1,762 mt WoW to 42,389 mt, both showing destocking.

In the short term, nickel prices are subject to a dual tug-of-war between cost support and supply-demand surplus, and are expected to remain in the doldrums within the 121,000-127,000 yuan/mt range. On the macro front, attention should still be paid to the impact of uncertainties surrounding Trump's tariff policies on the market. The marginal effect of the China-US tariff reduction agreement has weakened, and the US threat to impose a 50% tariff on the EU will trigger market risk-averse sentiment.