[SMM Nickel Midday Review] Nickel Prices Experienced a Significant Correction on January 16, Central Bank Cuts Relending and Rediscount Rates by 0.25 Percentage Points

SMM Nickel Market Update on January 16:

Macro and Market News:

(1) The central bank decided: Starting from January 19, 2026, the interest rates for relending and rediscounting will be lowered by 0.25 percentage points. After the adjustment, the three-month, six-month, and one-year relending rates for supporting agriculture and small businesses are 0.95%, 1.15%, and 1.25%, respectively; the rediscounting rate is 1.5%; the pledged supplementary lending rate is 1.75%; and the rate for special structural monetary policy tools is 1.25%.

(2) Central bank data showed that preliminary statistics indicated the cumulative increase in the aggregate financing to the real economy for the full year of 2025 was 35.6 trillion yuan, up 3.34 trillion yuan from the previous year. The full-year increase in RMB loans was 16.27 trillion yuan. At the end of December, the outstanding broad money (M2) was 340.29 trillion yuan, up 8.5% YoY.

Spot Market:

On January 16, the price range for SMM #1 refined nickel was 144,700-154,000 yuan/mt, with an average price of 149,350 yuan/mt, down 700 yuan/mt from the previous trading day. The quotation range for spot premiums of Jinchuan #1 refined nickel was 6,000-7,000 yuan/mt, with an average premium of 6,500 yuan/mt, down 1,500 yuan/mt from the previous trading day. The quotation range for spot premiums and discounts of mainstream domestic brands of electrodeposited nickel was -200-500 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2602) opened slightly higher in the morning session but then pulled back significantly, closing the morning session at 142,540 yuan/mt, down 3.19%.

The nickel market is still caught in a fierce tug-of-war between "strong expectations for Indonesian policies" and "the reality of high inventory and weak demand." In the short term, as long as expectations for production cuts on the supply side in Indonesia persist, nickel prices may continue to hover at highs.