[SMM Nickel Midday Review] Nickel prices plummeted by over 10,000 yuan in a single day on February 2, as Trump announced the nomination of Kevin Warsh for Fed Chairman.

SMM Nickel February 2 News:

Macro and Market News:

(1) National Bureau of Statistics (NBS): The manufacturing PMI in January was 49.3%, down 0.8 percentage points MoM.

(2) Trump announced the nomination of Kevin Warsh as Fed Chairman, stating that it was inappropriate to ask Warsh to cut interest rates, and that rate cuts do not require pressure from the White House. Warsh is expected to gain support from Democrats and is anticipated to promote interest rate cuts.

Spot Market:

On February 2, SMM #1 refined nickel prices were 135,000-145,000 yuan/mt, with an average price of 140,200 yuan/mt, down 5,950 yuan/mt from the previous trading day. The mainstream spot premiums for Jinchuan #1 refined nickel were quoted in the range of 8,500-9,000 yuan/mt, with an average premium of 8,750 yuan/mt, up 1,500 yuan/mt from the previous trading day. The spot premiums/discounts for mainstream domestic electrodeposited nickel brands were quoted in the range of -400-400 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2603) opened lower and moved lower, plunging significantly in the morning session. By the end of the morning session, it was reported at 133,890 yuan/mt, down 8.09%.

Today's sharp decline in nickel prices was influenced by both the receding macro funds and the reality of high industrial inventory, with short-term market sentiment being bearish. Current end-use demand showed no signs of improvement, while production increased significantly and inventory pressure continued to rise.