SMM Nickel News, March 9: Macro and Market Updates: (1) US nonfarm payrolls in February unexpectedly fell by 92,000, and the unemployment rate edged up to 4.4%. Nonfarm payrolls for December last year and January this year were revised down by a combined 69,000. After the data release, the implied probability of a US Fed interest rate cut in June quickly rose to about 50% (2) Minister of Finance Lan Fo’an said at an economy-themed press conference on the 6th that this year’s fiscal funding arrangements hit “new highs” in three areas; fiscal policy in 2026 will continue to maintain a more proactive stance; the central government will allocate 100 billion yuan to support fiscal-financial coordination to boost domestic demand; innovative policy tools for fiscal-financial coordination to boost domestic demand will be established, focusing on two key areas: household consumption and private investment; special funds for fiscal-financial coordination to boost domestic demand at the 100-billion-yuan level can benefit credit at the trillion-yuan level. Spot Market: On March 9, the SMM #1 refined nickel price fell by 1,600 yuan/mt from the previous trading day. In terms of spot premiums, the average premium for Jinchuan #1 refined nickel was 7,250 yuan/mt, up 500 yuan/mt from the previous trading day; the range for mainstream domestic brands of electrodeposited nickel was -300-400 yuan/mt. Futures Market: After the morning open, the most-traded SHFE nickel contract (2605) plunged immediately, hitting a low of 132,000 yuan/mt, then rebounded sharply. As of the morning close, it was at 137,380 yuan/mt, up 0.47%. A stronger US dollar index, coupled with risk-off sentiment triggered by heightened geopolitical tensions in the Middle East, weighed on base metal prices. In the short term, the most-traded SHFE nickel contract price is expected to move sideways within 130,000-140,000 yuan/mt.

[SMM Morning Meeting Minutes: Weak Non-Farm Payrolls Data; LME Zinc Posted a Bullish Candlestick] Last Friday, LME zinc opened at $3,240.0/mt and dipped to $3,221.0/mt in early trading. It then saw its center fluctuate upward at a slow pace. After entering the night session, it accelerated higher and touched a high above $3,343.0/mt, finally closing up at $3,323.0/mt, up $93/mt, a gain of 2.88%. Trading volume increased to 121,000 lots, while open interest fell by 516 lots to 219,000 lots.

The seasonally adjusted data released by the US in February showed that nonfarm payroll employment fell by 92,000, marking the second time since 2020 that employment posted a negative monthly change. The market had previously expected an increase of 59,000, while the prior reading was revised from an increase of 130,000 to an increase of 126,000. Meanwhile, the US unemployment rate in February was 4.4%, slightly above the market expectation of 4.3% and also higher than the prior reading of 4.3%. In addition, the YoY increase in average hourly earnings rose to 3.8%, indicating that labor cost pressure remained in place.

US Fed Governor Cook pointed out that the rise of AI technology has triggered generational shifts in the US labour market, a change that may lead to an increase in the unemployment rate. In this context, the US Fed may find it difficult to respond through interest rate cuts, and monetary policy could face a dilemma: on one hand, interest rate cuts have limited effectiveness in addressing structural unemployment; on the other hand, they may further push up inflation.

Futures: Overnight, LME lead opened at $1,987.5/mt, hovering around the daily moving average during the Asian session. Entering the European session, it rose to a high of $1,994.5/mt before weakening, touching a low of $1,972/mt before the close, and finally closed at $1,979/mt after a slight rebound, down $16.5/mt, a decrease of 0.83%. Overnight, the most-traded SHFE lead contract opened at 16,800 yuan/mt, fell to a low of 16,740 yuan/mt after opening, then rebounded to a high of 16,820 yuan/mt, and finally closed at 16,800 yuan/mt after brief consolidation, forming a doji, up 45 yuan/mt from the previous settlement price, an increase of 0.27%. Data released by the State Administration for Market Regulation showed that 25.745 million new business entities were established nationwide in 2025, with rapid growth in enterprises related to emerging industries and future industries, indicating strong innovation momentum. Among them, frontier fields such as humanoid robots, civil aviation, and generative artificial intelligence led the gains. The number of Americans applying for unemployment benefits increased less than expected, indicating that layoffs remained at a low level. The third round of indirect talks between the US and Iran concluded, with the Iranian foreign minister stating that the two sides were close to reaching a consensus in some areas, and technical negotiations would be held in Vienna next Monday. The foreign minister of Oman, the mediating party, described the talks as having made significant progress. Media reports indicated that differences between the two sides remained significant, with the US insisting that Iran completely dismantle its nuclear facilities and transfer all enriched uranium out of the country; Iran proposed stopping nuclear activities for a limited number of years, after which enrichment activities would resume within a regulated regional framework. Spot fundamentals: In the Shanghai market, Chihong and Honglu lead was quoted at discounts of 50 yuan/mt to premiums of 50 yuan/mt against the SHFE lead 2604 contract. SHFE lead continued to hold up well. Some suppliers completed month-end inventory clearance, with individual large discount quotations narrowing, while other suppliers followed the market in shipments, mainly with cargoes self-picked up from primary lead smelters' production sites. Few secondary lead smelters had resumed production, with some having delayed plans; secondary refined lead quotations were scarce, and prices were firm, with mainstream producing areas offering at parity with the SMM #1 lead average price ex-works. Downstream enterprises resumed work gradually, but most still had certain inventory, resulting in low enthusiasm; spot order market transactions were sluggish. Inventory: On February 26, LME lead inventory was 286,300 mt, flat from the previous trading day. As of February 26, the total social inventory of lead ingots in five regions tracked by SMM continued to accumulate. Today's lead price forecast: This week, spot order procurement demand from downstream enterprises remained primarily for small, rigid needs. Many downstream enterprises were still consuming lead ingots stockpiled before the holiday after resuming work, and post-holiday lead ingot consumption appeared slightly weak. On the refined lead supply side, large-scale primary lead smelters in Henan maintained stable supply during the holiday. Smelter inventories accumulated significantly after the holiday, while the pace of production resumptions for secondary lead smelting enterprises that halted during the Chinese New Year was noticeably delayed compared to previous years. Under the current scrap battery and lead price conditions, secondary lead enterprises remained in a loss-making state upon resuming work, and concentrated production resumptions are expected to be delayed until March. This week, the supply and demand in the spot refined lead market have not fully recovered. Lead prices have moderate support at lower levels but struggle to rise due to pressure from increasing domestic inventory. In the short term, lead prices are expected to continue moving sideways.

[Price Review] During the Chinese New Year holiday, overseas precious metals were affected by multiple factors including US macro policies and Middle East geopolitical conflicts. Silver prices showed a V-shaped reversal trend, falling first and then rising. As of the closing on February 23, spot silver in London closed at $88.17 per ounce, up approximately 13.8% compared to the pre-holiday closing price of $77.46 per ounce on February 13. A pre-holiday decline in US stocks, combined with weakened liquidity, dragged down overseas precious metal prices, which continued to fall in the early part of the Chinese New Year holiday week. Subsequently, the US released its Q4 GDP growth for last year, which fell short of expectations, leading precious metals to stop falling and rebound. Last Friday (February 20), the US Supreme Court ruled to repeal most of the tariffs imposed by the Trump administration last year, and Trump immediately announced an additional 10% tariff on all global imports to the US over the next 150 days. This news reignited market concerns about trade conflicts and economic downturn. Additionally, stalled US-Iran negotiations, which could lead to a worsening situation in the Middle East, stimulated safe-haven demand. Precious metals surged significantly during the session, recovering previous losses, with silver leading the gains sharply. After the Chinese New Year holiday this week, uncertainties around tariff policies and geopolitical impacts continued to ferment. Domestic silver prices opened higher and extended their strong upward trend. After SHFE deliveries concluded on Thursday, spot cargo flowed out, and previously imported crude silver materials entered the market after processing, temporarily alleviating the tight supply of national standard silver ingots. Approaching the weekend, silver prices showed some weakness in continuing their rally. Regarding the gold/silver ratio, as silver led the precious metals gains during the holiday against a backdrop of low inventory levels, the gold/silver ratio dropped back slightly below 60 times. As of February 25, the LBMA gold/silver ratio pulled back to about 57 times. [Important Data] Bullish: US EIA crude oil inventories for the week ending February 13 were -9.014 million barrels, lower than the previous value and expectations. The final University of Michigan Consumer Sentiment Index for February was 56.6, lower than the previous value and expectations. Bearish: US initial jobless claims for the week ending February 14 were 206,000, lower than the previous value and expectations. The US core PCE price index annual rate for December was 3%, higher than the previous value and expectations. US EIA crude oil inventories for the week ending February 20 were 1,598.9, higher than the previous value and expectations. Data and macro news releases to focus on next week include: This Friday, the US will release the January core PCE price index, the inflation indicator most closely watched by the US Fed, which will directly impact monetary policy expectations. On March 6 (Friday) at 21:30, the US will release the February seasonally adjusted non-farm payrolls data and unemployment rate, key indicators for assessing the US labour market conditions and the US Fed's policy direction. Next week, Fed Chairman Powell and several governors and voting members will deliver speeches, requiring attention to their latest statements on inflation, the job market, and the impact of tariff policies. U.S.-Iran situation: The third round of indirect talks between the U.S. and Iran was held on February 26, with both sides reaching consensus on the guiding principles for negotiations, but core disagreements remain. The U.S. military has deployed two aircraft carriers to the Middle East, and the period from March to July 2026 is a high-risk window, requiring vigilance against risks of negotiation breakdown or escalation of military friction. [Price Forecast] Silver prices have ended the wild swings in the short term. As London silver prices break through the 50-day daily average and stabilize above key support levels, bulls are expected to return to the market. Overall, overseas silver prices may move sideways next week, but risks of high fluctuations due to further escalation of U.S.-Iran negotiation outcomes and Trump's tariff policies still require caution. On the domestic spot price front, despite robust downstream demand, previously imported crude silver and large ingots have been processed and refined and are gradually entering the market. Some suppliers have slightly lowered their premium quotes, and further narrowing of domestic silver ingot premium is expected.