SMM Nickel, September 15:
Macro and market news:
(1) The US Fed begins its policy meeting today, with the FOMC meeting held on September 15-16 (results announced in the early hours of September 17 Beijing time). CME FedWatch shows the probability of a 25 bp rate hike has risen above 86%, and a Reuters poll found 86 of 101 economists expect a hike to 3.75%-4.00%. Overnight, the 10-year US Treasury yield broke above 5% intraday (the first time since October 2023), closing at 4.991%; the US dollar index jumped 0.39% to 99.48, its largest single-day gain since the Jackson Hole meeting. Market focus has shifted to the dot plot and Warsh's press conference—whether this hike is a "one-off adjustment" or the start of a tightening cycle.
(2) Oil prices returned above the $100 mark as the Saudi crude pipeline is set to be largely offline for weeks. The Saudi East-West crude pipeline was halted after an attack (the pipeline accounts for about 4% of global oil supply), and reports say most of its capacity will be disrupted for several weeks, with Saudi Arabia seeking to increase oil shipments via the Strait of Hormuz. Overnight, WTI closed up 1.44% at $98.01/bbl (intraday it again broke above $100), and Brent rose 1.41% to $103.16/bbl; the US Strategic Petroleum Reserve fell to 285 million barrels, the lowest since 1982, and the Department of Energy said replenishment would begin in the coming months.
(3) China's August financial data were stable, and economic data are released today. At end-August, M2 rose 7.5% YoY and the stock of aggregate financing rose 7.2% YoY; the PBoC conducted 500 billion yuan of outright reverse repos today with equal-amount rollover to support liquidity. At 10:00 today, the National Bureau of Statistics released August economic data: industrial value added rose 5.2% YoY, in line with expectations, while retail sales growth missed expectations. This week is a "super central bank week," with the Bank of England on Thursday and the Bank of Japan on Friday (expected to hike 25 bp to 1.25%) taking the stage in succession.
Spot market:
On September 15, the SMM average price of #1 refined nickel was 125,050 yuan/mt, down 1,050 yuan/mt from the previous trading day. In terms of spot premiums, the average for Jinchuan #1 refined nickel was 2,900 yuan/mt, up 100 yuan/mt from the previous trading day, while mainstream domestic brands of electrodeposited nickel were quoted in a range of -100 to 500 yuan/mt.
Futures market:
The most-traded SHFE nickel contract (2610) opened lower and moved lower in the morning session, closing the morning at 124,120 yuan/mt, down 0.77%.
Short-term outlook:
The US Fed's rate decision is about to be announced. A 25 bp hike is already largely priced in; the real variables are the dot plot and the subsequent tightening path signaled by Warsh's remarks. The 10-year Treasury yield breaking above 5% and a stronger US dollar continue to pressure base metals. Nickel's own high inventory and weak demand picture remains unchanged, but cost support also limits downside room. In the short term, the most-traded SHFE nickel contract is expected to trade in a range of 123,000-128,000 yuan/mt.
![[SMM Nickel Sulphate Daily Review] Spot Market Trading Sluggish on September 15, Nickel Sulphate Prices Slightly Lower](https://imgqn.smm.cn/usercenter/Btmsv20251217171733.jpg)