[SMM Nickel Midday Review] Nickel prices fluctuated at lows on October 29, as the U.S. government shutdown is expected to continue.

SMM Nickel October 29 News:

Macro and Market News:

(1) The CPC Central Committee's Proposal for Formulating the 15th Five-Year Plan for National Economic and Social Development was released. The proposal suggests fostering and strengthening emerging and future industries. Accelerate the development of strategic emerging industrial clusters such as new energy, new materials, aviation and aerospace, and the low-altitude economy. Promote quantum technology, biomanufacturing, hydrogen and nuclear fusion energy, brain-computer interfaces, embodied AI, and sixth-generation mobile communication to become new economic growth drivers.

(2) The US Senate rejected the temporary funding bill for the 13th time, and the US government shutdown will continue. The suspension of food assistance due to the government shutdown has led to lawsuits filed by multiple US states.

Spot Market:

On October 29, the SMM #1 refined nickel price was 120,400-123,400 yuan/mt, with an average price of 121,900 yuan/mt, down 250 yuan/mt from the previous trading day. The mainstream spot premium quotation range for Jinchuan #1 refined nickel was 2,300-2,500 yuan/mt, with an average premium of 2,400 yuan/mt, up 100 yuan/mt from the previous trading day. The spot premiums/discounts quotation range for mainstream domestic brands of electrodeposited nickel was -300-100 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2512) opened lower in the night session and maintained rangebound fluctuations, closing down 0.2% at the end of the session. On the 29th, prices pulled back further in the morning session, and as of the midday close, it was quoted at 120,780 yuan/mt, down 0.29%.

Market bets on the probability of a US Fed interest rate cut in October reached as high as 97.3%, and China-US economic and trade consultations made positive progress, with both sides reaching preliminary consensus on a series of issues including tariffs. This progress alleviated market concerns about escalating trade friction. Despite favorable factors on the macro front such as interest rate cut expectations and trade easing, LME nickel inventory continued to climb to 251,238 mt, hitting a new record high. The high inventory structure continues to confirm the supply surplus in the nickel market, becoming the most direct factor suppressing nickel prices. Nickel prices are expected to move sideways in the near term, with a reference price range of 120,000-124,000 yuan/mt.