[SMM Nickel Midday Review] On March 20, Nickel Prices Rebounded After an Oversell, and the Central Bank Will Continue to Implement a Moderately Accommodative Monetary Policy

SMM Nickel, March 20:

Macro and Market News:

(1) The Party Committee of the People's Bank of China held an enlarged meeting on March 18, which stated that it would continue to effectively implement a moderately accommodative monetary policy, firmly safeguard the stable operation of financial markets such as equities, bonds, and foreign exchange, and advance legislative formulation and amendments including the People's Bank of China Law and the Financial Stability Law.

(2) The interest rate futures market priced in only 5.5 basis points of US Fed interest rate cuts this year, and bets on rate hikes began to emerge.

Spot Market:

On March 20, the SMM price of #1 refined nickel rose by 3,000 yuan/mt from the previous trading day. In terms of spot premiums, the average price of Jinchuan #1 refined nickel was 6,550 yuan/mt, down 200 yuan/mt from the previous trading day, while the mainstream China electrodeposited nickel brands were quoted at -300-400 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2605) staged a sharp rebound, closing the morning session at 134,780 yuan/mt, up 1.50.

Yesterday, nickel prices once fell below the 130,000 yuan mark, as trades on expectations of a global economic recession triggered by escalating geopolitical conflict in the Middle East put the metals complex under pressure overall. Nickel prices then took the lead in rebounding sharply, recovering to around 135,000 yuan/mt in the morning session. Short term, sentiment from the macro perspective may continue to dominate the market, and nickel prices may maintain wide swings.