[SMM Nickel Midday Review] On August 25, nickel prices rebounded as Powell signaled a dovish stance

SMM Nickel Report on August 25:

Macro News:

(1) Powell "joins" the dovish camp, opening the door for a US Fed interest rate cut in September. Traders increase bets on a rate cut. Hammack: The US Fed needs to be cautious with any interest rate cut measures; significant weakness in the job market may prompt the US Fed to cut interest rates; the US Fed remains seriously off track in its inflation mission.

(2) On August 22, Premier Li Qiang chaired a regular State Council meeting, which heard a report on the implementation of large-scale equipment updates and trade-in policies for consumer goods. The meeting pointed out that based on a serious summary and evaluation of the policy implementation, it is necessary to strengthen overall coordination, improve the implementation mechanism, and better play the role in promoting domestic demand. It is essential to crack down on fraudulent and improper subsidy claims to ensure that subsidy funds are used effectively and achieve tangible results.

Spot Market:

Today, the SMM #1 refined nickel price was 119,800-122,700 yuan/mt, with an average price of 121,250 yuan/mt, up 700 yuan/mt from the previous trading day. The mainstream spot premiums for Jinchuan #1 refined nickel were quoted at 2,600-2,700 yuan/mt, with an average premium of 2,650 yuan/mt, up 50 yuan/mt from the previous trading day. The quotation range for domestic mainstream brands of electrodeposited nickel spot premiums and discounts was -100-300 yuan/mt.

Futures Market:

The most-traded SHFE nickel 2510 contract opened higher today, reporting 120,190 yuan/mt in the morning session, up 580 yuan from the night session closing price (120,150 yuan/mt); as of 11:30, the most-traded contract closed at 120,220 yuan/mt, with the intraday gain expanding to 0.54%.

Fed Chairman Powell unexpectedly released dovish signals at the Jackson Hole central banking conference, causing the market's bet on a September interest rate cut to surge from 75% to 90%, with expectations for two cuts within the year. The US dollar index fell in response, and nickel prices rebounded. However, high inventory levels continue to suppress the momentum of nickel price rebounds. It is expected that the market will remain in the doldrums, with a price range of 119,000-123,000 yuan/mt.