SMM Nickel, October 28:
Macro and market news:
(1) The US Fed's FOMC meeting concludes today, with the decision to be announced at 2:00 a.m. tomorrow. The market widely expects no change (probability of holding rates steady at about 89.5%), but the probability of a cumulative 25 bp hike by December exceeds 70%; whether Warsh signals a future rate hike path is in focus. The 10-year Treasury yield held near 4.97%.
(2) Oil prices broke below the $100 mark. Expectations of easing Middle East tensions rose (senior officials from three countries made surprise visits to Iran), with WTI down 1.83% at $99.90/bbl and Brent down 1.67% at $113.88; gold and silver rose as inflation concerns eased, with spot gold up 1.1% at $4,060/oz.
(3) China: The Fifth Plenary Session of the 20th Central Committee is underway (a communiqué will be released on the 29th).
Spot market:
On October 28, SMM #1 refined nickel averaged 119,950 yuan/mt, up 100 yuan/mt from the previous trading day. In terms of spot premiums, Jinchuan #1 refined nickel averaged 3,950 yuan/mt, down 250 yuan/mt from the previous trading day, while mainstream domestic electrodeposited nickel brands ranged from -300 to 600 yuan/mt.
Futures market:
The most-traded SHFE nickel contract (2612) moved sideways in the morning session, closing the morning at 118,190 yuan/mt, down 0.05%.
Short-term outlook:
With the US Fed decision due tonight, market sentiment is largely wait-and-see, and SHFE nickel moved sideways in the morning session. Given that nickel's own high-inventory, weak-demand structure remains unchanged, and the actual implementation of production cuts is still uncertain, the futures market has yet to establish a clear direction. In the short term, the most-traded SHFE nickel contract is expected to trade in the 118,000-120,000 yuan/mt range.
