[SMM Nickel Midday Review] On June 11, nickel prices dropped slightly, with the US and Mexico expected to reach an agreement on steel tariffs

SMM Nickel News on June 11:

Macro News:

(1) Recently, various automakers have announced that they will shorten the payment period for suppliers to within 60 days, in response to the requirements of the state and relevant ministries to ensure the stability of the industry chain and supply chain and promote the high-quality development of the automotive industry. Experts pointed out that automotive supply chain enterprises previously faced long payment cycles, sometimes up to nine months or even longer, leading to tight capital chains for many small and medium-sized supporting suppliers, who had to rely on discounting, short-term loans, and other means to maintain operations. Shortening the payment period can alleviate the financial pressure on suppliers and enhance their operational resilience and innovation capabilities.

(2) According to informed sources, the US and Mexico are on the verge of reaching an agreement to eliminate Trump's 50% tariff on steel imports below a certain quantity. Meanwhile, Indian and US negotiators have made progress, with negotiations focusing on market access, tariff reductions, and non-tariff barriers for industries and some agricultural products. India and the US are expected to reach an interim trade agreement before the end of this month.

Spot Market:

Today, the SMM 1# refined nickel price is 121,400-124,000 yuan/mt, with an average price of 122,700 yuan/mt, a decrease of 100 yuan/mt from the previous trading day. The mainstream spot premiums quotation range for Jinchuan #1 refined nickel is 2,400-2,500 yuan/mt, with an average premium of 2,450 yuan/mt, an increase of 50 yuan/mt from the previous trading day. The spot premiums and discounts quotation range for electrodeposited nickel from mainstream domestic brands is 0-300 yuan/mt.

Futures Market:

The most-traded SHFE nickel contract (NI2507) opened lower and fluctuated slightly during the night session yesterday, with no significant volatility during the daytime session. As of 11:30, SHFE nickel closed at 121,710 yuan/mt, an increase of 50 yuan/mt or 0.04% from the previous trading day.

Positive signals have been released from China-US economic and trade consultations, and expectations for US Fed interest rate cuts are diverging. However, the weak demand situation is difficult to improve, and the supply surplus continues to suppress the upside room for nickel prices. In the short term, nickel prices may fluctuate rangebound between 118,000-123,000 yuan/mt.