[SMM Nickel Midday Review] Nickel prices first fell then rose on September 5, as the central bank conducted 1,000 billion yuan in outright reverse repo operations.

SMM Nickel Market Update on September 5:

Macro News:

(1) Today, the central bank conducted 1,000 billion yuan in outright reverse repo operations to maintain ample liquidity in the banking system. Industry insiders noted this move effectively rolled over the three-month outright reverse repo operations maturing this month. Additionally, 300 billion yuan in six-month outright reverse repos are set to mature in September, and the central bank is expected to conduct another six-month outright operation upon maturity.

(2) On September 4 local time, US President Trump announced that the government would impose tariffs on imported products from semiconductor companies that fail to relocate production to the US. He emphasized exemptions for firms with US investment or factory construction plans.

Spot Market:

Today, SMM #1 refined nickel prices stood at 120,500-122,900 yuan/mt, averaging 121,700 yuan/mt, down 350 yuan/mt from the previous trading day. Jinchuan #1 refined nickel spot premiums were quoted at 1,900-2,200 yuan/mt, averaging 2,050 yuan/mt, flat day-on-day. Premiums/discounts for mainstream domestic electrodeposited nickel brands ranged between -200-200 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2510) continued its downward trend during the night session, closing at 120,990 yuan/mt, down 520 yuan/mt (0.43%). Early trading saw further declines, but prices rebounded in the afternoon, settling at 121,310 yuan/mt by the close, a 0.16% drop.

The recent rebound in the US dollar index and dollar strength directly pressured nickel prices, while capital shifted to safe-haven assets like gold and silver. The August US non-farm payrolls data due this week may reinforce interest rate cut expectations if weaker than forecast, supporting nickel prices to hold up well, with a projected range of 121,000-125,000 yuan/mt.