[SMM Nickel Midday Review] Nickel prices rose slightly on September 15 as China and the United States held talks on economic and trade issues in Madrid, Spain.

SMM Nickel September 15:

Macro and Market News:

(1) The People's Bank of China: In the first eight months, the cumulative increase in aggregate financing to the real economy was 26.56 trillion yuan, up 4.66 trillion yuan YoY; at the end of August, the balance of broad money (M2) was 331.98 trillion yuan, up 8.8% YoY; in the first eight months, RMB deposits increased by 20.5 trillion yuan.

(2) On September 14 local time, China and the US held talks in Madrid, Spain on economic and trade issues. On September 12, a spokesperson for the Ministry of Commerce responded to a reporter's question regarding the China-US talks in Spain, stating that, as agreed by both sides, He Lifeng, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, will lead a delegation to Spain from September 14 to 17 to hold talks with the US side. The two sides will discuss US unilateral tariff measures, abuse of export controls, and economic and trade issues such as TikTok.

Spot Market:

On September 15, the SMM #1 refined nickel price was 121,600-124,400 yuan/mt, with an average price of 123,000 yuan/mt, up 150 yuan/mt from the previous trading day. The mainstream spot premium quotation range for Jinchuan #1 refined nickel was 2,200-2,400 yuan/mt, with an average premium of 2,300 yuan/mt, up 150 yuan/mt from the previous trading day. The spot premiums/discounts quotation range for mainstream domestic brands of electrodeposited nickel was -100-200 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2510) consolidated at high levels during the night session, basically holding above the 122,000 yuan/mt level, and closed at 122,010 yuan/mt in the night session, up 0.68%. After the daytime session opened, it pulled back slightly, then rose again, and was quoted at 122,350 yuan/mt at the morning break, up 0.96%.

US economic data strengthened expectations for interest rate cuts, with August non-farm payrolls far below expectations, the unemployment rate rising to 4.3%, and PPI growth slowing down. Market expectations for a US Fed interest rate cut heated up, with the probability exceeding 96%. Loose expectations supported a rebound in nickel prices. The China-US high-level economic and trade consultations were held in Spain from September 14 to 17, with both sides discussing issues such as tariff measures and export controls. The progress in China-US negotiations eased some tense sentiment. Currently, the macro environment is favorable, but nickel fundamentals are weak. Nickel prices are expected to remain volatile in the short term, with the most-traded SHFE nickel contract reference range at 120,000-124,000 yuan/mt.