[SMM Nickel Midday Review] Nickel prices were in the doldrums on December 12, as the Central Economic Work Conference indicated that a more proactive fiscal policy will be implemented next year.

SMM Nickel December 12 News:

Macro and Market News:

(1) The Central Economic Work Conference was held in Beijing from December 10 to 11. The conference pointed out that next year's economic work should adhere to the principles of seeking progress while maintaining stability, improving quality and efficiency, leveraging the integrated effects of existing policies and incremental policies, strengthening counter-cyclical and cross-cyclical adjustments, and enhancing the effectiveness of macroeconomic governance. More proactive fiscal policy will continue to be implemented. A moderately loose monetary policy will also continue.

(2) He Yadong, spokesperson for the Ministry of Commerce, stated yesterday that the Ministry of Commerce will plan for the innovation, transformation, and high-quality development of the retail industry during the 15th Five-Year Plan period, increasing policy support. Efforts will be made to create a number of highly influential retail scenarios, introduce a batch of integrated and innovative business models, cultivate a group of internationally competitive retail enterprises, and promote the construction of a modern retail system.

Spot Market:

On December 12, the SMM #1 refined nickel price was 115,400-121,000 yuan/mt, with an average price of 118,200 yuan/mt, down 650 yuan/mt from the previous trading day. The mainstream spot premium quotation range for Jinchuan #1 refined nickel was 5,100-5,300 yuan/mt, with an average premium of 5,200 yuan/mt, up 100 yuan/mt from the previous trading day. The spot premiums and discounts quotation range for mainstream domestic brands of electrodeposited nickel was -100-400 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2601) continued to fluctuate and trend lower, closing down 0.33% in the night session and remaining in the doldrums during the morning session. As of the close, it was reported at 115,360 yuan/mt, a decrease of 0.74%.

The US Fed announced an interest rate cut of 25 basis points as expected, but the macro impact was weaker than the logic dominated by nickel fundamentals, causing nickel prices to fall instead of rise. In the short term, nickel prices are expected to remain in the doldrums, with the price range for the most-traded SHFE nickel contract forecasted at 114,000-118,000 yuan/mt.