[SMM Nickel Midday Review] On October 10, market bullish sentiment receded, and nickel prices pulled back.

SMM Nickel Market Update on October 10:

Macro and Market News:

(1) On October 9, the Ministry of Commerce and the General Administration of Customs jointly issued four announcements, imposing export controls on items related to ultra-hard materials, rare earth equipment and auxiliary materials, five types of medium-heavy rare earths including holmium, lithium batteries, and artificial graphite anode materials.

(2) The National Development and Reform Commission (NDRC) and the State Administration for Market Regulation issued the "Announcement on Regulating Disorderly Price Competition and Maintaining Good Market Price Order," sending a clear signal of efforts to maintain a fair and orderly competitive market environment. The announcement pointed out that price competition is one of the important ways of market competition, but disorderly competition can negatively impact industry development, product innovation, quality and safety, which is detrimental to the healthy development of the national economy.

Spot Market:

On October 10, the SMM #1 refined nickel price was 122,400-125,300 yuan/mt, with an average price of 123,850 yuan/mt, up 250 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, down 50 yuan/mt from the previous trading day. The spot premium/discount quotation range for mainstream domestic brands of electrodeposited nickel was -150-200 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2511) opened at 123,620 yuan/mt on October 10. Prices pulled back in the morning session as bullish sentiment receded. By the close of the morning session, it was quoted at 122,520 yuan/mt, down 0.49%.

The market will focus on the progress of Indonesia's RKAB approval and signals from the US Fed's policies in the near term. If nickel ore supply from Indonesia tightens more than expected, or if the US Fed sends clearer signals of interest rate cuts, nickel prices may rebound. Despite the tug-of-war between longs and shorts on the macro front, nickel prices are expected to have limited room for change amid the persistent surplus and inventory buildup. The most-traded SHFE nickel contract is expected to trade within a reference range of 120,000-124,000 yuan/mt in the short term.