[SMM Nickel Midday Review] On May 29, nickel prices plummeted, breaking through the 120,000 yuan/mt Ni support level, with active spot market transactions and premiums rising

SMM Nickel News on May 29:

Macro News:

(1) The US Court of International Trade ruled on Wednesday local time that US President Trump did not have the authority to impose a blanket tariff on nearly all countries, thereby declaring the "Emancipation Day" tariff measure on April 2, which triggered a global trade war and could have upended the world economy, legally invalid. The Court of International Trade in Manhattan, New York, stated that the US Constitution grants the US Congress the exclusive power to regulate trade with other countries, and that the emergency powers claimed by the President to protect the US economy do not override these powers.

(2) He Lifeng, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, met with Dan Simkowitz, Co-President of Morgan Stanley, at the Great Hall of the People on the 28th. He Lifeng stated that China is committed to promoting high-quality development through high-level opening-up, which will energize and add momentum to both the Chinese and global economies. He welcomed more US financial institutions, including Morgan Stanley, and long-term capital to continue deepening mutually beneficial cooperation with China and actively participating in the construction and development of China's capital market. Simkowitz expressed his delight at the substantive progress made in the US-China economic and trade talks, stating that Morgan Stanley would continue to deepen its presence in the Chinese market and provide high-quality services to promote investment cooperation between US and Chinese enterprises.

Spot Market:

Today, the SMM 1# refined nickel price is 120,000-123,050 yuan/mt, with an average price of 121,525 yuan/mt, a decrease of 1,725 yuan/mt from the previous trading day. The quotation range for the mainstream spot premiums of Jinchuan #1 refined nickel is 2,300-2,700 yuan/mt, with an average premium of 2,500 yuan/mt, an increase of 300 yuan/mt 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.

Due to the significant drop in SHFE nickel futures prices yesterday, trading volume in the afternoon spot market was active, with the premium range at 2,200-2,500 yuan/mt. Today, there is less refined nickel circulating in the market, and premiums have risen significantly.

Futures Market:

The most-traded SHFE nickel contract (NI2507) plummeted sharply yesterday, closing at 119,950 yuan/mt, a daily decline of 2.1%. The cumulative weekly decline reached 3.2%, breaking through the key support level of 120,000 yuan/mt. The night session continued to probe the bottom, touching a low of 118,630 yuan/mt. Prices rebounded somewhat in the morning session today, returning to the 120,000 yuan/mt level, but still remained in the doldrums. As of 11:30, the closing price was 120,340 yuan/mt, up 0.72%.

In the medium and long-term, the contradiction of global nickel overcapacity remains unresolved, with the nickel market under triple pressure of "high supply, weak demand, and tight funds". The short-term oscillation bottom is seen at 115,000 yuan/mt, with the top under pressure at 123,000 yuan/mt.