[SMM Nickel Midday Review] Nickel prices rebound on June 19, with central bank governor Pan Gongsheng announcing eight major financial policies

SMM Nickel June 19 Report:

Macro News:

(1) The US Fed maintained interest rates unchanged for the fourth consecutive time in its June meeting. The dot plot indicated two rate cuts this year, but the number of officials expecting no cuts in 2024 rose to seven. Expectations for next year's rate cuts were reduced to one. Powell continued to emphasize uncertainty, stating the current economic conditions warrant a wait-and-see approach. He also anticipated tariff-driven inflation increases in coming months.

(2) The US Treasury's TIC report showed foreign holdings of US Treasuries neared record highs in April. China's holdings decreased to $757 billion from $765 billion in March, while the UK's rose to $808 billion from $779 billion. Japan held $1.135 trillion versus $1.131 trillion in March.

Spot Market:

Today's SMM #1 refined nickel prices ranged 119,050-121,600 yuan/mt, averaging 120,325 yuan/mt, up 500 yuan/mt from the previous session. Jinchuan #1 refined nickel spot premiums quoted 2,500-2,700 yuan/mt, averaging 2,600 yuan/mt, flat day-on-day. Domestic mainstream electrodeposited nickel spot premiums/discounts ranged 0-400 yuan/mt.

Futures Market:

The most-traded SHFE nickel 2507 contract rebounded in the night session and fluctuated rangebound in daytime trading: it closed 0.6% higher at 119,050 yuan/mt overnight as macro pressure eased post-Fed decision; daytime trading saw it open higher and touch 119,100 yuan/mt intraday, settling at 118,800 yuan/mt by midday, up 0.39%. LME nickel followed suit, last quoted at $15,095/mt after a 1.07% overnight gain.

Short-term, nickel prices are expected to maintain sideways movement within 118,000-123,000 yuan/mt. Potential tightening of Indonesian nickel ore policies may trigger periodic rebounds, but medium and long-term supply surplus pressure persists alongside lackluster demand growth, limiting upside room.