[SMM Nickel Midday Review] June 9 Nickel Prices Plunge, Rate Hike Expectations Continue to Weigh on Risk Asset Prices

SMM Nickel June 9:

Macro and Market News:

(1) According to customs statistics, in the first five months of this year, China's total goods trade imports and exports reached 20.68 trillion yuan, up 15.3% YoY. Among them, trade with ASEAN, the EU, and Africa grew 16.6%, 10.3%, and 18.2% respectively; trade with Belt and Road partner countries reached 10.57 trillion yuan, up 13.6% YoY.

(2) Trump urged Israel and Iran to stop mutual attacks, stating that peace negotiations are underway. Iran subsequently announced a temporary halt to strikes against Israel, warning Israel not to attack Lebanon; Israeli Prime Minister Netanyahu also instructed the military to stop preparations for a new round of attacks on Iran, and a senior Israeli official revealed that if Israel proper is attacked, they would strike the southern suburbs of Beirut.

Spot Market:

On June 9, SMM #1 refined nickel prices fell by 2,250 yuan/mt from the previous trading day. Regarding spot premiums, the average premium for Jinchuan #1 refined nickel was 1,050 yuan/mt, up 50 yuan/mt from the previous trading day, and the range for domestic mainstream electrodeposited nickel brands was -500 to 400 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2607) plunged during the session, repeatedly setting new lows, and as of the morning close, it was at 135,960 yuan/mt, down 2.23%.

After the US nonfarm payrolls far exceeded expectations, market bets on rate hikes surged significantly, the US dollar index hit a two-month high, US Treasury yields stayed high, and macro headwinds continued to weigh on risk asset prices. The US-Iran peace talks seesawed, and while the logic of sulfur cost support remains, the marginal impact of geopolitical news is diminishing. In the short term, nickel prices, weighed down by macro pressures, saw a sharp oversold decline, with room for a rebound ahead.