[SMM Nickel Midday Review] On July 15, nickel prices consolidated lower, US June inflation cooled significantly.

SMM Nickel, July 15:

Macro & Market News:

(1) US June CPI rose 3.5% YoY, versus an estimated 3.8% and a prior 4.2%. The US June CPI fell 0.4% MoM, compared to an estimated 0.1% decline and a 0.5% prior increase. Following the release of the US June CPI data, traders pushed back expectations for US Fed interest rate hikes to October.

(2) General Administration of Customs: Since the beginning of this year, China’s export growth has exceeded 10%, maintaining expansion for 11 consecutive quarters.

Spot Market:

On July 14, SMM #1 refined nickel price fell by 250 yuan/mt from the previous trading day. On spot premiums, Jinchuan #1 refined nickel averaged 2,000 yuan/mt, down 100 yuan/mt from the prior trading day, while premiums for mainstream domestic electrodeposited nickel brands ranged from -300 to 500 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (2609) drifted lower in early trading, closing the morning session at 128,870 yuan/mt, down 0.43%.

US June inflation cooled significantly, with unadjusted core CPI rising 2.6% YoY, below the market expectation of 2.8% and the prior 2.9%. The cooling inflation further delayed expectations for US Fed interest rate hikes, and the US dollar extended its decline. In the short term, nickel prices may rebound, with the most-traded SHFE nickel contract seen trading in the range of 127,000-133,000 yuan/mt.