[Nickel Midday Market Review] Nickel Prices Plunge Sharply on December 11, US Fed Announces Interest Rate Cut as Expected by 25 Basis Points

SMM Nickel December 11 News:

Macro and Market News:

(1) The US Fed announced a 25-basis-point cut in the federal funds rate target range to 3.5%-3.75%, meeting expectations. The Fed's dot plot projections indicate one 25-basis-point rate cut each in 2026 and 2027. Fed Chairman Powell stated that the Fed has been adjusting toward the neutral rate and is currently at the upper end of the neutral rate range, with no decision made yet on January matters.

(2) National Bureau of Statistics: November CPI rose 0.7% YoY, down 0.1% MoM; PPI fell 2.2% YoY, up 0.1% MoM.

Spot Market:

On December 11, SMM #1 refined nickel prices were 116,100-121,600 yuan/mt, averaging 118,850 yuan/mt, down 300 yuan/mt from the previous trading day. The mainstream spot premiums for Jinchuan #1 refined nickel were quoted in the range of 5,000-5,200 yuan/mt, averaging 5,100 yuan/mt, up 50 yuan/mt from the previous trading day. The spot premiums/discounts for mainstream domestic brands of electrodeposited nickel were quoted in the range of -100-400 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2601) opened lower in the night session and continued to decline, closing down 0.72%. Prices fell further in the morning session, settling at 116,920 yuan/mt by the close, down 0.7%.

Early this morning, the US Fed cut interest rates by 25 basis points as expected, but the macro impact was outweighed by nickel fundamentals, and nickel prices fell instead of rising. In the short term, nickel prices are expected to remain in the doldrums, with the most-traded SHFE nickel contract price forecast to trade in the range of 114,000-118,000 yuan/mt.