[SMM Nickel Midday Review] On December 23, nickel prices broke through 123,000 yuan/mt. US Fed Governor Milan stated that the necessity of a 50-basis-point interest rate cut has diminished.

SMM Nickel December 23 News:

Macro and Market News:

(1) US Fed Governor Michelle Bowman stated that the necessity to support a 50-basis-point interest rate cut has diminished. If no one succeeds the governor position by January 31 next year, she may continue to serve.

(2) On December 22, Li Qiang, Member of the Standing Committee of the Political Bureau of the CPC Central Committee and Premier of the State Council, presided over a meeting of the State Council's Leading Group for Drafting the Outline of the 15th Five-Year Plan, conducting an in-depth study on the drafting work. Li Qiang pointed out the need to further clarify tasks and measures, refine and implement the strategic tasks defined in the proposal for the 15th Five-Year Plan to make the plan's content better aligned with development needs, and plan a number of major projects, major programs, and major platforms that drive the overall situation.

Spot Market:

On December 23, the SMM #1 refined nickel price was 121,500-129,000 yuan/mt, with an average price of 125,250 yuan/mt, up 3,450 yuan/mt from the previous trading day. The mainstream spot premium quotation range for Jinchuan #1 refined nickel was 6,800-7,000 yuan/mt, with an average premium of 6,900 yuan/mt, up 200 yuan/mt 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 (2602) opened higher and moved upward during the night session, continuing to strengthen in the morning session and breaking through the 123,000 yuan/mt level. By the midday close, it was quoted at 123,100 yuan/mt, a gain of 3.64%.

Expectations of supply contraction driven by Indonesian policies are the dominant market logic currently, stimulating bullish sentiment and leading to a continued significant rebound in nickel prices. In the short term, the price center of nickel is expected to maintain a fluctuating upward trend driven by market sentiment, but the upside remains capped by high inventory and weak demand fundamentals, limiting the rebound's extent.