[SMM Nickel Midday Comment] On July 1, nickel prices continued to fall under pressure, and interest rate futures showed that the probability of the US Fed raising rates in September rose to 80%.

SMM Nickel July 1 Daily Report:

Macro and Market News:

(1) US Fed's Hammack: Inflation remains too high and a rate hike may need to be considered; interest rate futures show the probability of a US Fed September rate hike has risen to 80%.

(2) Middle East situation—① Iranian Foreign Ministry: "has basically no plan to hold any level of meeting with the US side" in the coming days. Talks with mediator Qatar on implementing the US-Iran agreement may be held in Doha on July 1, with topics including the release of unfrozen assets.

Spot market:

On July 1, SMM #1 refined nickel prices rose by 300 yuan/mt from the previous trading day. In terms of spot premiums, the average for Jinchuan #1 refined nickel was 1,950 yuan/mt, up 150 yuan/mt from the previous trading day, and the range for mainstream China electrodeposited nickel brands was -400 to 400 yuan/mt.

Futures market:

The most-traded SHFE nickel contract (2609) plunged in early trading before recovering slightly, and stood at 125,600 yuan/mt by the morning close, down 0.61%.

A stronger US dollar and market expectations shifting toward a "hawkish" Fed policy kept the macro environment challenging, and markets focused on this week's US ADP and non-farm payrolls data, with nickel prices expected to be in the doldrums in the 125,000-135,000 yuan/mt range in the near term.