[SMM Nickel Midday Review] Nickel Prices Continued to Rise on September 16, "Qiushi" Reiterates Effective Governance of Involution

SMM Nickel September 16:

Macro and Market News:

(1) The 18th issue of "Qiushi" magazine published on September 16 will feature an important article by Xi Jinping, General Secretary of the Communist Party of China Central Committee, President of the State, and Chairman of the Central Military Commission, titled "Advancing the Construction of a National Unified Market in Depth." The article points out efforts to rectify the chaos of enterprises engaging in low-priced and disorderly competition. Sectors severely affected by "involution" must be effectively governed in accordance with laws and regulations.

(2) On September 16 local time, the US Department of Commerce issued a notice in the Federal Register stating that the Bureau of Industry and Security (BIS) has established procedures to include more derivative products of steel and aluminum products within the tariff scope authorized by US President Trump under Section 232 of the Trade Expansion Act of 1962.

Spot Market:

On September 16, SMM #1 refined nickel prices were 122,300-124,900 yuan/mt, with an average price of 123,600 yuan/mt, up 600 yuan/mt from the previous trading day. The mainstream spot premiums for Jinchuan #1 refined nickel were quoted in the range of 2,100-2,300 yuan/mt, with an average premium of 2,200 yuan/mt, down 100 yuan/mt from the previous trading day. The spot premiums and discounts for mainstream domestic brands of electrodeposited nickel were quoted in the range of -100-200 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2510) fluctuated rangebound at high levels during the night session, closing slightly higher at the end of the session. It closed at 122,310 yuan/mt in the night session, up 140 yuan/mt (a gain of 0.11%). In today's early session, SHFE nickel continued to fluctuate upward.

US economic data strengthened expectations for US Fed 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 US Fed interest rate cuts warmed, with the probability exceeding 96%. Loose expectations supported a rebound in nickel prices. High-level China-US 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 alleviated some tense sentiment. Currently, the macro environment is favorable, but nickel fundamentals are weak. Nickel prices are expected to fluctuate rangebound in the short term, with the most-traded SHFE nickel contract reference range at 120,000-124,000 yuan/mt.