SMM Nickel News, May 26:
Macro and market news:
(1) A draft agreement between the US and Iran was reportedly reached, allowing free and open passage through the Strait of Hormuz and the clearing of mines; navigation through the Strait of Hormuz is to be restored within 30 days.
(2) Iran's Ministry of Foreign Affairs: No transit fees will be imposed on the Strait of Hormuz. Charging for services provided is normal, but it should not be regarded as a toll.
Spot market:
On May 26, SMM #1 refined nickel prices fell 2,600 yuan/mt from the previous trading day. Spot premiums: Jinchuan #1 refined nickel averaged 1,100 yuan/mt, down 50 yuan/mt from the previous trading day, while mainstream domestic electrodeposited nickel brands ranged from -400-500 yuan/mt.
Futures market:
The most-traded SHFE nickel 2606 contract plunged sharply in the morning session, closing at 142,280 yuan/mt, down 1.08%.
The Strait of Hormuz is about to reopen, and the sulfur supply deficit is expected to ease. The fading of geopolitical risk premiums weakened the short-term cost-side support for nickel prices, leading to a sharp decline. Currently, global refined nickel visible inventory remains at elevated levels, and sluggish downstream consumption has slowed the destocking process. Nickel prices lack upward momentum, and the most-traded SHFE nickel contract is expected to trade in the range of 137,000-145,000 yuan/mt in the short term.
