[SMM Nickel Midday Review] Nickel prices edged down on May 18; industrial value added of enterprises above designated size grew 5.6% YoY in real terms from January to April

SMM Nickel News, May 18:

Macro and market news:

(1) Data from the National Bureau of Statistics (NBS) showed that from January to April, the value-added of industrial enterprises above designated size grew 5.6% YoY in real terms. In April, the value-added of industrial enterprises above designated size was up 4.1% YoY. On a MoM basis, the value-added of industrial enterprises above designated size in April increased 0.05% from the previous month.

(2) Russian President Putin will pay a state visit to Beijing from May 19 to 20. The visit is part of routine diplomatic interactions between Moscow and Beijing.

Spot market:

On May 18, SMM #1 refined nickel prices fell 900 yuan/mt from the previous trading day. Spot premiums: Jinchuan #1 refined nickel averaged 1,550 yuan/mt, up 150 yuan/mt from the previous trading day. Domestic mainstream brand electrodeposited nickel premiums ranged from -500-500 yuan/mt.

Futures market:

The most-traded SHFE nickel 2606 contract dipped then rebounded in the morning session, closing at 142,200 yuan/mt, down 1.17%.

After the previous rally in nickel prices, concentrated profit-taking by bulls, combined with high inventory levels and pessimistic macro sentiment, led to significant capital outflows, and nickel prices came under pressure with a sharp correction. However, the cost floor support from elevated sulphur prices still exists, and expectations for tighter supply 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.