SMM Nickel Market Morning Comment (Jul 15)

Last week, SHFE nickel showed a volatile downward trend. It slightly rebounded on Friday due to macro and news factors and finally closed at 135,010 yuan/mt. Nickel prices are still relevant to changes in macroeconomics and fundamentals. At the beginning of the week, nickel prices fluctuated downward due to expectations of a surplus in fundamentals, followed by a slight increase driven by supply-side news. On the macro front, the US June CPI showed an unexpectedly sharp decline in inflation, leading the market to expect that the US Fed might cut interest rates. In terms of news, Australian nickel company BHP announced that it will temporarily shut down the Nickel West and West Musgrave Project nickel mines and related projects in October, which is estimated to impact about 60,000 mt of nickel metal production. Additionally, adverse weather in parts of the Philippines may also affect the departure of cargo ships, with the specific impact yet to be assessed. In the spot market, refined nickel spot consumption was boosted by downstream restocking as nickel prices fluctuated downward earlier, with spot transactions heating up when nickel prices touched around 133,000 yuan/mt. It is worth noting that domestic nickel plates remained scarce in the market, mainly as the price spread between domestic and overseas markets did not narrow. Despite a decline in export profits, some nickel companies and traders still chose to export domestic nickel plates. Overall, there are no significant changes in the current macro and fundamental aspects, and the nickel price range is similar to the previous one.