[SMM Nickel Midday Review] Nickel Prices Pulled Back on August 28, Profits of Large-Scale Industrial Enterprises Nationwide Declined 1.5% YoY in July

SMM Nickel Report on August 28:

Macro News:

(1) At a briefing on economic and trade cooperation within the Shanghai Cooperation Organization (SCO) hosted by the Ministry of Commerce, officials reported that China's trade with SCO member states reached a record high. In 2024, China's trade volume with other member countries was approximately $512.4 billion, an increase of 2.7% YoY.

(2) In July, profits of industrial enterprises above designated size in China fell by 1.5% YoY, narrowing by 2.8 percentage points from June, marking two consecutive months of contraction. Notably, the profit growth of high-tech manufacturing industries turned from a 0.9% decline in June to an 18.9% increase in July, boosting the overall profit growth rate of industrial enterprises above designated size by 2.9 percentage points compared to June, demonstrating a significant leading role.

Spot Market:

Today, SMM #1 refined nickel prices were 120,400-123,100 yuan/mt, with an average price of 121,750 yuan/mt, up by 1,400 yuan/mt from the previous trading day. The spot premiums for Jinchuan #1 refined nickel ranged from 2,100-2,400 yuan/mt, averaging 2,250 yuan/mt, down by 250 yuan/mt from the previous trading day. The spot premiums and discounts for domestic mainstream brands of electrodeposited nickel ranged from -100-200 yuan/mt.

Futures Market:

The most-traded SHFE nickel 2510 contract closed at 120,890 yuan/mt during the night session, down 940 yuan/mt (a decrease of 0.77%). This morning, the contract opened lower and continued to fall, opening at 121,220 yuan/mt (down 610 yuan), and closing at 120,670 yuan/mt by midday, a drop of 0.95%.

The implementation of US tariff policies, including a 50% auto tariff on India, which officially came into effect, impacting core areas of nickel consumption such as stainless steel, along with proposed increases in pharmaceutical tariffs by 1,400%-1,500%, has escalated trade tensions. President Trump's pressure on US Fed Governor Cook to resign raised concerns over the independence of monetary policy. If political interference intensifies, it may strengthen market bets on more accommodative policies. It is expected that nickel will maintain a fluctuating trend, with a price range of 119,000-123,000 yuan/mt.