[SMM Ni Midday Review] On June 8, nickel prices rebounded slightly, as US May non-farm payrolls increased by 172,000, exceeding expectations.

SMM June 8 – SMM Nickel:

Macro and Market News:

(1) US non-farm payrolls increased by 172,000 in May, beating expectations, while job gains for March and April were revised up by a combined 93,000. The market is fully pricing in a 25bp rate hike by the US Fed before year-end.

(2) The PBOC increased gold reserves for a 19th consecutive month, up 320,000 ounces MoM; China’s foreign exchange reserves rose to $3,442.2 billion at the end of May.

Spot Market:

On June 8, SMM #1 refined nickel price rose 1,400 yuan/mt from the previous trading day. In terms of spot premiums, Jinchuan #1 refined nickel averaged 1,000 yuan/mt, up 50 yuan/mt from the previous trading day, while electrodeposited nickel from mainstream domestic brands ranged from -600 to 400 yuan/mt.

Futures Market:

The most-traded SHFE nickel 2607 contract edged higher in early trading and closed the morning session at 139,830 yuan/mt, up 0.79%.

US non-farm payrolls data beat expectations, fueling rate hike bets; the US dollar strengthened, weighing on risk assets. Global visible refined nickel inventory stood at around 390,000 mt, and China continued to see inventory buildup. Nickel prices faced resistance. However, the supply of sulfur, an auxiliary material for intermediate products, remained tight, and MHP production cuts have not been resumed. Strong cost support at the bottom remains. The most-traded SHFE nickel contract is seen trading in a range of 137,000-145,000 yuan/mt.