[SMM Nickel Midday Review] On July 31, nickel prices fell below 120,000 yuan/mt Ni, driven downward by both domestic and international macro environments

SMM Nickel News on July 31:

Macro News:

(1) The Political Bureau of the CPC Central Committee held a meeting on July 30 to analyze and study the current economic situation and deploy economic work for the second half of the year. General Secretary Xi Jinping presided over the meeting. The meeting emphasized that macroeconomic policies should continue to be implemented vigorously and appropriately strengthened. More proactive fiscal policies and moderately loose monetary policies should be implemented in detail to fully unleash their effects. The meeting also stressed the need to enhance the attractiveness and inclusiveness of the domestic capital market and consolidate the momentum of its stabilization and improvement.

(2) The US Fed maintained the benchmark interest rate at 4.25%-4.50% during its July interest rate meeting, keeping it unchanged for the fifth consecutive time, which was in line with market expectations. Powell stated that the current policy stance was in a favorable position; no decisions had been made regarding the September meeting; and decisions could not be made based on the June dot plot six weeks later, but would rely on data.

Spot Market:

Today, the SMM #1 refined nickel price ranged from 119,900 to 122,600 yuan/mt, with an average price of 121,250 yuan/mt, a decrease of 1,800 yuan/mt from the previous trading day. The mainstream spot premiums quotation range for Jinchuan #1 refined nickel was 2,100-2,300 yuan/mt, with an average premium of 2,200 yuan/mt, an increase of 100 yuan/mt from the previous trading day. The spot premiums and discounts quotation range for electrodeposited nickel from mainstream domestic brands was -200 to 300 yuan/mt.

Futures Market:

The most-traded SHFE nickel 2509 contract opened lower today and continued to weaken, breaking through the key price level of 120,000 yuan/mt during the session. As of the midday break, SHFE nickel was quoted at 119,970 yuan/mt, down 1.68%.

The US Fed maintained interest rates unchanged during its July interest rate meeting, but there were internal divisions over the timing of interest rate cuts. Powell stated that "it was too early to judge an interest rate cut in September," and the US dollar index strengthened. Meanwhile, the short-term stimulus effect of domestic "anti-rat race" policies on industrial products weakened, and the Political Bureau meeting emphasized "market-oriented and rule-of-law-based governance of overcapacity." The combined impact of internal and external macroeconomic environments drove nickel prices downward. It is expected that nickel prices will return to the logic of fundamental surplus in the future, with the price center continuing to move lower.