SMM Nickel Update on August 22:
Macro News:
(1) Most US Fed officials remain cautious about cutting interest rates. Bostic: Still expects one rate cut this year, with concerns over the labour market; Schmid: Inflation risks outweigh employment risks, and current policy is in a suitable position; Harker: Does not support a rate cut in September; Collins: A rate cut may be appropriate in the short term if the labour market outlook deteriorates. We cannot wait for complete clarity on inflation before considering a rate cut.
(2) A 500 billion yuan "quasi-fiscal" tool is set to be launched! Based on information from local sources, the new policy-based financial tool will have a funding scale of 500 billion yuan, focusing on emerging industries, infrastructure, and other areas, including digital economy, artificial intelligence, low-altitude economy, consumer sectors, green and low-carbon, agriculture and rural areas, transportation and logistics, and urban infrastructure. Policy banks such as the China Development Bank, Agricultural Development Bank of China, and Export-Import Bank of China are involved.
Spot Market:
Today's SMM #1 refined nickel price is 119,100-122,000 yuan/mt, with an average price of 120,550 yuan/mt, down 550 yuan/mt from the previous trading day. The mainstream spot premiums for Jinchuan #1 refined nickel range from 2,500-2,700 yuan/mt, with an average premium of 2,600 yuan/mt, up 100 yuan/mt from the previous trading day. The quotation range for domestic mainstream brands of electrodeposited nickel spot premiums and discounts is -100-300 yuan/mt.
Futures Market:
The most-traded SHFE nickel 2510 contract closed at 119,760 yuan/mt during the night session, down 0.36% (a decrease of 430 yuan). This morning, it opened lower and continued to fall, reporting around 119,480 yuan/mt at 11:30, with the daily decline expanding to 0.6%.
Nickel prices are mainly driven downward by a strong US dollar and expectations of tightening liquidity, while the positive impact of trade agreements is suppressed by the US dollar and has not provided sustained support. Amidst the tug-of-war between longs and shorts on the macro front, nickel prices struggle to rebound and are expected to remain in the doldrums, with a price range of 119,000-123,000 yuan/mt.
