[SMM Nickel Midday Review] Nickel prices fell by over 1,000 yuan on June 23, with intensified geopolitical risks in Iran

SMM Nickel News on June 20:

Macro News:

(1) US President Trump confirmed on the evening of the 21st that the US military had conducted air strikes on three Iranian nuclear facilities. On the 22nd, Kowsari, a member of the Iranian Parliament's National Security and Foreign Policy Commission, stated that the Iranian Parliament had concluded that the Strait of Hormuz should be closed, but the final decision rested with the Supreme National Security Council of Iran. The Strait of Hormuz, located between Oman and Iran, connects the Gulf of Oman in the east with the Persian Gulf in the west. It is the only maritime passage for oil from the Gulf region to be transported to various parts of the world, with approximately one-third of the world's seaborne crude oil trade passing through it.

(2) US Secretary of State Rubio, in an interview with US media on the 22nd local time, called for direct negotiations between the US and Iran and expressed the US's readiness to engage in dialogue with Iran on the 23rd. Rubio reiterated that Iran could have a civilian nuclear program but could not engage in uranium enrichment. Rubio stated that Iran had rejected the US's proposal and had disappeared for 10 days before the US launched military action against it. Despite Iran's continuous messaging to its interlocutors, it had not even engaged in direct talks with the US.

Spot Market:

Today, the SMM 1# refined nickel price ranged from 118,100 to 120,900 yuan/mt, with an average price of 119,500 yuan/mt, a decrease of 1,125 yuan/mt from the previous trading day. The mainstream spot premiums quotation range for Jinchuan #1 refined nickel was 2,600-2,900 yuan/mt, with an average premium of 2,600 yuan/mt, an increase of 150 yuan/mt from the previous trading day. The spot premiums and discounts quotation range for electrodeposited nickel from mainstream domestic brands was 0-400 yuan/mt.

Futures Market:

The most-traded SHFE nickel 2507 contract opened at 118,190 yuan/mt, a decrease of 590 yuan from yesterday's settlement price. It continued to weaken during the trading session, closing at 117,100 yuan/mt at midday, a decrease of 1,680 yuan/mt or 1.41%.

The surplus pattern of refined nickel is difficult to reverse, and the price center may gradually move lower. It is expected that nickel prices will maintain sideways movement within the range of 115,000-121,000 yuan/mt. Support from ore prices and cost lines form the bottom, but macro risk-averse sentiment and inventory pressure constrain rebound momentum.