What to Expect from Nickel Price Following 75bp US Rate Hike?

SHANGHAI, Sep 22 (SMM) - At 2:00 am on September 22 Beijing time, the Federal Reserve announced a 75-basis-point rate hike to lift the target range of the federal funds rate to 3.00%-3.25%. It is worth noting that according to statistics, the market priced in an 82% probability of a 75-basis-point rate hike, and only 18% for a 100bp hike. Therefore, the final rate resolution is basically in line with market expectations. It is expected that the rate hike will have a limited impact on the non-ferrous metals market. And the metals prices even look set to usher in a rebound amid support from the seasonal high that usually comes in in September and October, as well as expected slowing rate hike pace in the future. The actual trend of non-ferrous metals prices should take into consideration the fundamentals of the varieties.

For the nickel industry chain, it is still in the peak season in September, and the improvement in downstream stainless steel and new energy sectors has greatly boosted the market sentiment. The demand in the alloy sector is still promising, and the demand for pure nickel is rising as well. Considering the low pure nickel inventory in China and abroad, nickel prices are currently well supported.

Throughout 2022, although the primary nickel market is still oversupplied, the surplus is mainly contributed by NPI. For nickel sulphate, the raw materials are unable to be processed timely due to insufficient salt capacity, leading to lingering supply tightness of nickel sulphate. While pure nickel imports are expected to decline, the supply is also relatively tight. SMM believes that there is little room for nickel prices to fall in the near future, and market players are advised to wait and see the follow-up demand situation.