[SMM Nickel Midday Review] Nickel prices dropped slightly on September 18, as the US Fed announced an interest rate cut of 25 basis points.

SMM Nickel September 18:

Macro and Market News:

(1) The US Fed FOMC announced a 25-basis-point interest rate cut early Thursday morning, marking its first rate cut in 2025. Regarding the dot plot, 10 officials anticipated at least two more 25-basis-point rate cuts within the year, with Milan, presumed to be the "voice of the White House," seemingly calling for "more than 100 basis points of additional rate cuts" within the year.

(2) Ministry of Finance data showed that from January to August, national general public budget revenue reached 14,819.8 billion yuan, up 0.3% YoY. Securities transaction stamp duty from January to August was 118.7 billion yuan, up 81.7% YoY. Calculated figures show that securities transaction stamp duty in August increased 226% YoY and 66% MoM.

Spot Market:

On September 18, SMM #1 refined nickel prices were 121,400-124,000 yuan/mt, with an average price of 122,700 yuan/mt, down 100 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, flat from the previous trading day. Spot premiums and discounts for mainstream domestic electrodeposited nickel brands were quoted in the range of -100-300 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2510) remained in the doldrums during the night session, closing at 121,860 yuan/mt, down 170 yuan/mt (a decline of 0.14%). In today's early session, SHFE nickel opened lower and continued to decline, once dipping to 121,090 yuan/mt, and maintained a weak and fluctuating pattern during the session. By the midday close, it was quoted at 121,280 yuan/mt, down 0.61%.

The US Fed cut interest rates by 25 basis points as expected, lowering the federal funds rate to the 4.00%-4.25% range. The rate cut met market expectations, and macro tailwinds materialized, leading to broad declines in the nonferrous metals sector. The surplus in the nickel market showed no improvement, with LME nickel inventory continuing to climb, increasing by 2,034 mt to 228,468 mt on September 17, with notable growth in Asian warehouse inventories. 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.