[SMM Nickel Midday Review] Nickel Prices Plunge Sharply on November 21 as Expectations for US Fed Interest Rate Cut Weaken

SMM Nickel November 21:

Macro and Market News:

(1) September non-farm payrolls unexpectedly surged by 119,000, but the unemployment rate climbed to 4.4%, the highest in four years, complicating the US Fed's interest rate cut decision; interest rate markets still priced in no rate cut by the Fed in December.

(2) As the mixed non-farm payrolls data failed to dispel market doubts about a December Fed rate cut, the US dollar index maintained fluctuating trend above the 100 mark, hitting a six-month high during the session, and ultimately closed up 0.105% at 100.23; all three major US stock indices fell, with the Dow down 0.84%, the S&P 500 down 1.55%, and the Nasdaq Composite down 2.15%.

Spot Market:

On November 21, SMM #1 refined nickel prices were 114,400-119,000 yuan/mt, with an average price of 116,700 yuan/mt, down 1,500 yuan/mt from the previous trading day. The mainstream spot premiums for Jinchuan #1 refined nickel were quoted in the range of 4,000-4,400 yuan/mt, with an average premium of 4,200 yuan/mt, up 100 yuan/mt from the previous trading day. The spot premiums/discounts for mainstream domestic brands of electrodeposited nickel were quoted in the range of 0-500 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2601) fluctuated rangebound during the night session; after the morning session opened, prices fell sharply, and by the midday close, it was quoted at 114,110 yuan/mt, down 1.70%.

US September non-farm payrolls data exceeded expectations, showing economic resilience; the latest Fed meeting minutes indicated a high degree of caution within the Fed about declaring victory over inflation. The market was generally under pressure and fell today. Overall, against the backdrop of macro pressure and high inventory, nickel prices are expected to remain in the doldrums.