[SMM Nickel Midday Review] Nickel prices continued to decline on June 12, with US CPI inflation in May falling short of expectations across the board

SMM Nickel News on June 12:

Macro News:

(1) Data released by the US Department of Labor showed that the full impact of Trump's across-the-board tariff hikes had not yet fully materialized, with US CPI inflation in May coming in below expectations across the board. The data indicated that the US unadjusted CPI year-on-year rate for May was recorded at 2.4%, lower than the market expectation of 2.5%. The seasonally adjusted CPI month-on-month rate for May was recorded at 0.1%, below the expected 0.2% and the previous value of 0.2%. Trump called on the US Fed to cut interest rates by 100 basis points.

(2) From June 9 to 10 local time, He Lifeng, the Chinese lead negotiator for economic and trade affairs and Vice Premier of the State Council, held the first meeting of the China-US Economic and Trade Consultation Mechanism in London, UK, with US lead negotiators, US Treasury Secretary Bessent, Commerce Secretary Raimondo, and Trade Representative Tai. Both sides engaged in candid and in-depth dialogue, exchanged in-depth views on economic and trade issues of mutual concern, reached a consensus in principle on the framework of measures to implement the important consensus reached during the phone call between the two heads of state on June 5 and to consolidate the outcomes of the Geneva economic and trade talks, and made new progress in addressing each other's economic and trade concerns.

Spot Market:

Today, the SMM 1# refined nickel price was 120,650-123,150 yuan/mt, with an average price of 121,900 yuan/mt, down 800 yuan/mt from the previous trading day. The quotation range for spot premiums of mainstream Jinchuan #1 refined nickel was 2,350-2,500 yuan/mt, with an average premium of 2,425 yuan/mt, down 25 yuan/mt from the previous trading day. The quotation range for premiums and discounts of mainstream domestic electrodeposited nickel was -100-300 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (NI2507) opened lower in yesterday's night session and prices continued to decline, once again falling below 120,000 yuan/mt, before fluctuating rangebound at the 120,500 yuan/mt level during the daytime session. As of 11:30, SHFE nickel closed at 120,490 yuan/mt, down 1,020 yuan/mt from the previous trading day, with a change of 0.84%.

Positive signals were released from the China-US economic and trade consultations. Expectations for US Fed interest rate cuts diverged, but the weak demand situation was difficult to improve. The supply surplus continued to suppress the upside room for nickel prices, which may fluctuate rangebound within the 118,000-123,000 yuan/mt range in the short term.