[SMM Nickel Midday Commentary] On March 27, nickel prices dropped slightly, and China and the United States maintained communication regarding President Trump's visit to China.

SMM Nickel, March 27:

Macro and Market News:

(1) On March 26 local time, multiple US officials and informed sources revealed that the US Department of Defense was formulating a so-called "final blow" military option against Iran, and the relevant plans may include the deployment of ground forces and large-scale airstrike operations.

(2) In response to US President Trump saying that he would visit China in mid-May, Foreign Ministry spokesperson Lin Jian said at a regular press conference on March 26 that head-of-state diplomacy plays an irreplaceable strategic guiding role in China-US relations, and the two sides have remained in communication regarding President Trump's visit to China.

Spot Market:

On March 27, the SMM price of #1 refined nickel fell by 350 yuan/mt from the previous trading day. In terms of spot premiums, the average price premium of Jinchuan #1 refined nickel was 4,900 yuan/mt, down 500 yuan/mt from the previous trading day; spot premiums for mainstream electrodeposited nickel brands in China were -600-400 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2605) maintained rangebound fluctuations and closed the morning session at 137,010 yuan/mt today, up 0.01%.

Policy expectations that Indonesia may impose a nickel export tax, together with firm ore prices on the raw material side and easing macro sentiment, jointly drove nickel prices higher. Nickel prices are expected to hold up well in the short term, with the core trading range of the most-traded SHFE nickel contract at 133,000-143,000 yuan/mt.