[SMM Nickel Midday Review] Nickel prices fell sharply on June 30, and the official manufacturing PMI for June returned to expansion territory.

SMM Nickel, June 30 News:

Macro and Market News:

(1) Data from the National Bureau of Statistics (NBS) showed that in June, the manufacturing PMI was 50.3%, up 0.3 percentage points from the previous month, returning to expansion territory; the non-manufacturing business activity index and the composite PMI output index stood at 50.2% and 50.6%, respectively, both up 0.1 percentage point from the previous month, indicating a rebound in China's economic prosperity.

(2) Despite US President Trump insisting that a new round of talks between the US and Iran would be held in Doha, Qatar on Tuesday following recent hostilities, Iran denied, stating that there were no plans for any negotiations with the US in the coming days. Meanwhile, Iran again emphasized its control over the Strait of Hormuz on Monday.

Spot Market:

On June 30, the price of SMM #1 refined nickel fell by 4,100 yuan/mt from the previous trading day. In terms of spot premiums, the average for Jinchuan #1 refined nickel was 1,800 yuan/mt, up 200 yuan/mt from the previous trading day, while the range for mainstream domestic brands of electrodeposited nickel was -400 to 400 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2609) plunged sharply in the night session, further approached the 124,000 yuan level in the morning session before rebounding, and closed the morning session at 126,800 yuan/mt, down 1.80%.

July is about to enter a key period for quota supplement and revision applications, with inventory pressure remaining the core contradiction. The supply of refined nickel is ample and inventories are difficult to digest, with domestic and international refined nickel stocks still at high levels and a slow destocking speed. In the short term, nickel prices are expected to trade in a range of 125,000-135,000 yuan/mt, remaining in the doldrums.