[SMM Nickel Midday Review] Nickel Prices Dropped Slightly on December 5 as DRC and Rwanda Ended 30-Year Conflict

SMM Nickel December 5 News:

Macro and Market News:

(1) Today, the central bank conducted 1,000 billion yuan in outright reverse repo operations using a fixed amount, interest rate tender, and multiple-price winning method, with a maturity of 3 months (91 days), to maintain ample liquidity in the banking system. Data shows that 1,000 billion yuan in 3-month outright reverse repos matured in December. Based on the central bank's announcement, this month's operation was a full rollover of the maturing amount.

(2) On the 4th, DRC President Félix Tshisekedi and Rwandan President Paul Kagame formally signed a peace agreement in Washington D.C., the US capital, aiming to end a conflict that has lasted for 30 years.

Spot Market:

On December 5, the SMM #1 refined nickel price was 117,400-122,700 yuan/mt, with an average price of 120,050 yuan/mt, down 350 yuan/mt from the previous trading day. The mainstream spot premium quotation range for Jinchuan #1 refined nickel was 4,800-5,000 yuan/mt, with an average premium of 4,900 yuan/mt, unchanged from the previous trading day. The spot premiums and discounts quotation range for mainstream domestic brands of electrodeposited nickel was -200-400 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2601) pulled back after a slight rise during the night session, closing at 117,700 yuan/mt, down 0.03%. It fluctuated downward in the morning session, and as of the midday close, was quoted at 117,500 yuan/mt, a decrease of 0.2%.

The latest US ADP employment data for November unexpectedly decreased, reinforcing signs of an economic slowdown. Market expectations for a US Fed interest rate cut in December have risen to approximately 89%. With a slight recent decline in inventory levels, nickel prices are expected to maintain a fluctuating trend in the short term. The price range for the most-traded SHFE nickel contract is projected to be 114,000-118,000 yuan/mt.