[SMM Nickel Midday Review] Nickel prices continued to decline on May 28; the State Council called for comprehensive efforts to address "cut-throat competition"

SMM Nickel News on May 28:

Macro News:

(1) The plenary session of the Expert Advisory Group of the Anti-Monopoly and Anti-Unfair Competition Committee of the State Council was held in Beijing. The meeting emphasized the need to closely align with the committee's work plans, focusing on key tasks such as accelerating the construction of a unified national market, comprehensively addressing "cut-throat competition," and strengthening competition regulation and law enforcement. The group was urged to take proactive measures and better fulfill its responsibilities as an expert advisory body, contributing wisdom and strength to enhancing fair competition governance capabilities and maintaining a fair and competitive market order.

(2) European Central Bank (ECB) Governing Council member Robert Holzmann stated that the bank should at least postpone further interest rate cuts until September, warning that caution was warranted given the brewing trade war between the EU and the US. He believed there was "no reason" for the ECB to cut interest rates at its meetings in June and July. Holzmann remarked, "The risks of further interest rate cuts would outweigh the benefits of maintaining the current level." He argued that further interest rate cuts at this stage might be "completely ineffective" for economic activity in the Eurozone. Holzmann's hawkish remarks suggest divisions among ECB rate-setters as they weigh how to respond to the trade war initiated by Trump ahead of their next meeting on June 5.

Spot Market:

Today, the SMM 1# refined nickel price is 122,000-124,500 yuan/mt, with an average price of 123,250 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 2,100-2,300 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, also unchanged from the previous trading day.

Futures Market:

The most-traded SHFE nickel contract (NI2507) opened lower and weakened during the night session yesterday. Prices continued to decline in the morning session, closing at 121,620 yuan/mt by 11:30, down 0.73%. Nickel prices have broken through the previous 123,000 yuan/mt platform and have been closing lower consecutively, with weak support below.

Currently, the macro front has a relatively small impact on nickel prices. Nickel is primarily under pressure due to supply and demand surpluses and high inventory levels, with weak cost support below. It is expected that nickel will remain in the doldrums in the near future.