[SMM Nickel Midday Review] On June 15, nickel prices rebounded sharply. The US and Iran announced the cessation of hostilities and will formally sign the agreement this Friday.

SMM Nickel Jun 15 News:

Macro and Market News:

(1) As the Iran war neared the four-month mark, US-Iran peace talks achieved a breakthrough. The US, Iran, and key mediator Pakistan all indicated that an agreement had been reached and would be formally signed in Switzerland this Friday.

(2) The People's Bank of China announced that on the 15th, it would conduct a 600 billion yuan outright reverse repo operation with a 6-month (183-day) tenor, using a fixed quantity, rate tender, and multiple-price auction method. Given that 600 billion yuan of this tenor matured during the month, this 6-month outright reverse repo operation was a full rollover.

Spot Market:

On Jun 15, SMM #1 refined nickel prices rose by 500 yuan/mt from the previous trading day. For spot premiums, Jinchuan #1 refined nickel averaged 1,650 yuan/mt, down 100 yuan/mt from the previous trading day, while the mainstream domestic electrodeposited nickel range was -500-400 yuan/mt.

Futures Market:

The most-traded SHFE nickel 2607 contract strengthened throughout the morning session, closing the morning at 136,120 yuan/mt, up 1.27%.

The US and Iran reached a memorandum of understanding in Islamabad, extending the US-Iran ceasefire by 60 days. The Strait of Hormuz is about to reopen, and both sides have declared an end to hostilities and will formally sign the agreement this Friday. The recovering macro sentiment supported a collective rebound in non-ferrous metals prices; however, the extent of the nickel price rebound remained capped by inventory, with nickel prices expected to range between 133,000-140,000 yuan/mt.