[SMM Nickel Midday Review] On June 20, nickel prices moved up slightly, with the PBOC's LPR quotes for both tenors remaining unchanged MoM

SMM Nickel June 20 News:

Macro News:

(1) Today,the People's Bank of China authorized the National Interbank Funding Center to announce that the loan prime rates (LPR) on June 20, 2025 were: 3.0% for the 1-year LPR and 3.5% for the 5-year and above LPR.The LPR quotations for both tenors remained unchanged MoM. Industry insiders expect that the policy will enter an observation period in the short term, and LPR quotations may remain stable.Looking ahead, the central bank is expected to continue cutting interest rates in H2, with LPR quotations for both tenors likely to decline. Additionally, regulators may guide the 5-year and above LPR downward separately in H2 to promote more significant reductions in residential mortgage rates.

(2) The Bank of England announced on June 19 that it would maintain the benchmark interest rate at 4.25%, in line with market expectations. The decision was based on multiple considerations. On one hand, domestic inflation remains above the central bank's 2% target. On the other hand, escalating regional conflicts may disrupt global supply chains, potentially fueling inflation in the UK. Under these circumstances, the Bank of England adopted a cautious wait-and-see stance. However, internal calls for further rate cuts and accommodative monetary policies are growing. In the latest vote, 3 out of 9 Monetary Policy Committee members supported a 25-basis-point rate cut.

Spot Market:

Today, the SMM #1 refined nickel price ranged between 119,300-121,950 yuan/mt, averaging 120,625 yuan/mt, up 300 yuan/mt from the previous trading day.The mainstream spot premiums for Jinchuan #1 refined nickel quoted between 2,500-2,700 yuan/mt, averaging 2,600 yuan/mt, flat from the previous session. The spot premiums/discounts for domestic mainstream brands of electrodeposited nickel ranged between 0-400 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2507) saw narrowed intraday fluctuations and closed slightly higher in the afternoon session. The night session edged down: closed at 118,820 yuan/mt, down 0.06%; the daytime session rebounded: opened at 118,930 yuan/mt (up 40 yuan), hit a high of 119,130 yuan/mt, and settled at 118,640 yuan/mt by midday, down 0.21%. LME nickel also stabilized, temporarily quoted at $15,005/mt.

Short-term, nickel prices are expected to fluctuate rangebound between 118,000-123,000 yuan/mt. Tightening nickel ore policies in Indonesia may trigger a phased rebound; however, medium and long-term supply surplus pressure persists, coupled with lackluster demand growth, limiting upside room for nickel prices.