[SMM Nickel Midday Review] Nickel prices rebounded on May 20; May LPR remained unchanged MoM

SMM Nickel News May 20:

Macro and market news:

(1) This week, US President Trump, who had been pressuring the US Fed to cut interest rates, softened his tone, saying he would let incoming Fed Chairman Wach act on his own ideas. The market now sees a 60% probability of the US Fed raising interest rates before December.

(2) The May LPR quotes were released: the over-5-year LPR was 3.5%, unchanged from the previous month. The 1-year LPR was 3%, unchanged from the previous month.

Spot market:

On May 20, SMM #1 refined nickel prices rose 700 yuan/mt from the previous trading day. Spot premiums: Jinchuan #1 refined nickel averaged 1,450 yuan/mt, flat from the previous trading day, while mainstream domestic electrodeposited nickel brands ranged from -500-500 yuan/mt.

Futures market:

The most-traded SHFE nickel 2606 contract opened higher in the night session but pulled back continuously during the morning session, closing at 143,440 yuan/mt, up 0.51%.

After the previous rally in nickel prices, concentrated profit-taking by bulls, combined with high inventory and pessimistic macro sentiment, led to significant capital outflows, and nickel prices pulled back sharply under pressure. However, the cost floor support from elevated sulfur prices still exists, and expectations for supply-side tightening going forward remain strong, leaving room for nickel prices to rise and recover. In the short term, the most-traded SHFE nickel contract is expected to trade in the range of 142,000-152,000 yuan/mt.