[SMM Nickel Midday Review] Nickel Prices Continued to Decline on September 23, US Fed's Bostic Expects Only One Interest Rate Cut This Year

SMM Nickel September 23:

Macro and Market News:

(1) At a press conference held by the State Council Information Office, Pan Gongsheng, Governor of the People's Bank of China, stated that regarding the financial reform content for the "15th Five-Year Plan" and the next steps, further communication will be made after unified deployment by the central authorities. Currently, China's financial system is generally sound, and financial markets are operating smoothly. In response to the US Fed's interest rate cut, Pan Gongsheng indicated that based on macroeconomic performance and changing conditions, multiple monetary policy tools will be comprehensively utilized to ensure ample liquidity.

(2) The US Fed's Bostic: There is currently little reason for further interest rate cuts, with only one rate cut expected this year; Musalem: There is limited room for further rate cuts. If inflation risks increase, further rate cuts will not be supported.

Spot Market:

On September 23, SMM #1 refined nickel prices ranged from 120,500 to 123,400 yuan/mt, with an average price of 121,950 yuan/mt, down 750 yuan/mt from the previous trading day. The mainstream spot premiums for Jinchuan #1 refined nickel were quoted in the range of 2,300-2,400 yuan/mt, with an average premium of 2,350 yuan/mt, unchanged from the previous trading day. The spot premiums and discounts for mainstream domestic brands of electrodeposited nickel were quoted in the range of -100 to 200 yuan/mt.

Futures Market:

The closing price for the most-traded SHFE nickel contract (2511) was 121,410 yuan/mt, down 0.18%. In early trading, SHFE nickel prices pulled back, falling below 121,000 yuan/mt, and as of the midday close, it was reported at 121,140 yuan/mt, down 0.4%.

After macro positive factors were exhausted, the fundamental surplus pattern dominated the market. Although supply disruptions in Indonesia persist, they have not altered the overall expectation of ample supply. 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.