[July 6 Morning Briefing] The US added 57,000 nonfarm jobs in June, below market expectations of an increase of 110,000. The combined job gains for April and May were revised down by 74,000. The most-traded SHFE nickel 2609 contract surged to the 128,000 yuan/mt level in early trading before pulling back slightly, and by the end of the morning session it was reported at 127,190 yuan/mt, up 0.59%. The US nonfarm payrolls report came in surprisingly weak, leading the market to turn more cautious on the employment outlook. Expectations for US Fed interest rate hikes cooled markedly, and the US dollar fell sharply, providing a catalyst for a rebound in nickel prices. In the short term, nickel prices are expected to be in the doldrums in the 125,000-135,000 yuan/mt range.

The average price of SMM 10-12% high-grade NPI fell WoW by 13.3 yuan/nickel unit to 1,133.7 yuan/nickel unit (ex-factory, tax included), and the average price of the Indonesian NPI FOB index fell WoW by $0.31/nickel unit to $146.69/nickel unit. This week, the high-grade NPI market remained in the doldrums under a supply-demand tug-of-war and persistently sluggish trading, with prices under pressure overall.

[SMM Analysis] Stainless Steel Costs and Prices Pull Back in Tandem, Steel Mill Profits Remain Basically Stable This week, stainless steel prices and production costs fell together, and steel mill profit margins remained basically stable. Based on 304 cold-rolled as the benchmark, the profit margin calculated with current raw materials was 2.07%, while that using inventory raw materials was 1.33%. Nickel-based raw material cost side, high-grade NPI prices showed a pullback trend this week. During the week, SHFE nickel and SS futures were in the doldrums overall. Although there were widespread expectations of tight supply for high-grade NPI and upstream smelters and traders maintained firm offers, stainless steel mills' production schedule expectations pulled back, leading to weaker demand, and coupled with the simultaneous decline in stainless steel prices, the industry's acceptance of high-priced supply was very limited, and market transactions remained sluggish. As of this Friday, high-grade NPI with mainstream grade of 10%-12% fell by 8 yuan per nickel unit, closing at 1,133 yuan per nickel unit. Stainless steel scrap market, stainless steel scrap prices pulled back slightly this week. The weak futures market transmitted downward to spot cargo, and combined with sluggish off-season demand and reduced steel mill production schedules, rigid demand weakened further. Although steel scrap had an economic advantage over NPI, providing floor support for prices, uncertainty over Indonesian policies kept the market in a wait-and-see stance. Under the weight of bearish fundamentals, short-term stainless steel scrap prices are expected to continue to be in the doldrums. As of this Friday, the mainstream 304 off-cuts price in the Shanghai region fell by 100 yuan/mt, with the latest quotation at approximately 10,400 yuan/mt. Chromium-based raw material cost side, high-carbon ferrochrome prices continued to edge down this week. High-carbon ferrochrome production remained high...

[SMM Daily Review: Steel Scrap and Refined Nickel Have Cost-Effectiveness Advantage; Ferronickel Purchasing Demand Weak] On June 29, SMM high-grade NPI upstream sentiment factor was 2.4, down 0.04 MoM, and high-grade NPI downstream sentiment factor was 1.77, down 0.02 MoM.

[SMM Nickel Express] The SMM 10-12% high-grade NPI average price rose WoW by 0.87 yuan/nickel unit to 1,147 yuan/nickel unit (ex-factory, tax included), while the Indonesia NPI FOB Index average price fell WoW by 0.06 $/nickel unit to 147 $/nickel unit. This week, the high-grade NPI market was overall in the doldrums, with futures continuing to weaken and dragging on market sentiment, the resilience in holding prices firm for spot cargoes gradually fading, the tug-of-war between longs and shorts being intense, the buying-selling price spread widening, and overall trading extremely sluggish.

[SMM Analysis] Finished Product Prices Fall in Tandem, Stainless Steel Mill Profits Slightly Compressed This week, stainless steel prices and production costs declined in tandem, with steel mill profit margins narrowing slightly. Using 304 cold-rolling as the assessment basis, the profit margin calculated with current raw material costs stood at 2.28%, while that based on inventory raw materials was 2.1%. On the nickel-based raw material cost side, high-grade NPI prices showed a downward pullback this week. Affected by weakening SHFE nickel and SS futures, coupled with disturbances from Indonesian nickel ore news, although NPI producers and traders maintained a strong willingness to hold prices firm, expectations of off-season maintenance and production cuts at stainless steel mills and the pullback in stainless steel prices led to low acceptance of high-priced raw materials, driving high-grade NPI prices to decline and pull back. As of this Friday, high-grade NPI with a mainstream grade of 10%-12% fell by 8.5 yuan per nickel unit, closing at 1,141 yuan per nickel unit. In the stainless steel scrap market, prices fell in tandem this week. SS futures pulled back and stainless steel finished product prices declined, dragging down stainless steel scrap. Currently in the traditional consumption off-season, end-use demand is weak, and expectations of lower steel scrap demand due to mill production cuts and maintenance, along with bearish macro sentiment, led to more cautious purchasing attitudes. Although stainless steel scrap holds an economic advantage over NPI and finds some bottom support, it is struggling to withstand the combined weight of multiple bearish factors, and the short-term market remains under pressure. As of this Friday, mainstream 304 off-cuts in Shanghai fell by 50 yuan/mt, with the latest quotation at approximately 10,500 yuan/mt. On the chrome-based raw material cost side, high-carbon ferrochrome prices continued to edge down this week. This week, TISCO and Tsingshan successively...