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.

Nickel prices came under pressure and pulled back this week. Early in the week, rumors of tighter approvals for RKAB on the Indonesian ore side spurred the futures market to rally briefly, but it later retreated as US Fed officials repeatedly delivered hawkish remarks, the US dollar index held above 106, and global risk assets came under broad pressure. With tensions in the Middle East rising, macro risk-off sentiment strengthened, and nickel prices on SHFE and LME corrected notably. The most-traded SHFE nickel contract closed at 137,140 yuan/mt on Friday, down 1.6% on the week. The LME nickel 3M contract fluctuated between $17,000-17,900/mt this week, with a weekly decline of 2%. In the spot market, the weekly average price of SMM #1 refined nickel was 140,600 yuan/mt, down 2,150 yuan/mt WoW. The weekly average Jinchuan nickel premium was 6,900 yuan/mt, down 1,100 yuan/mt versus the week before Chinese New Year. Premiums for mainstream domestic brands of electrodeposited nickel ranged from -400-400 yuan/mt. After nickel prices fell this week, downstream restocking driven by rigid demand became more evident, and overall spot nickel plate shipments increased WoW. On the macro front, US ADP employment in February increased by 63,000, the largest rise since November 2025 and above the market expectation of 50,000, weakening expectations for US Fed interest rate cuts. Meanwhile, US January PCE and core PCE inflation data rose above expectations, and the US dollar index rebounded, creating short-term pressure on base metal prices. Geopolitical tensions continued to escalate this week, with Iran announcing the closure of the Strait of Hormuz, posing a potential threat to the sulfur supply chain. Domestically, the Two Sessions emphasized medium and long-term benefits from national defense spending, improving expectations for alloy demand in sectors such as defense industry and shipbuilding, which supported nickel alloy consumption. Inventory: Shanghai Bonded Zone inventory was about 2,200 mt this week, flat WoW. Domestic social inventory was about 85,000 mt, with an inventory buildup of about 8,000 mt WoW. Nickel prices are currently in a stalemate, with firmer cost support but unchanged near-term pressure. Tighter Indonesian RKAB quotas and tight nickel ore supply provided strong support for nickel prices, but levels above 140,000 yuan/mt faced strong resistance from high inventory and weak demand. The core expected trading range for the most-traded SHFE nickel contract next week is 130,000-140,000 yuan/mt.

In the first quarter of 2025, the Philippines saw a strong performance in nickel ore exports, achieving significant growth in export revenue despite the decline in international base metal prices. According to data from the Philippines Statistics Authority, the export value of nickel ore and its concentrates rose markedly compared to the same period last year, reflecting sustained global demand for the country’s resources. China remained the largest importer of Philippine nickel ore, followed by Indonesia. Additionally, export volumes also increased, underscoring the Philippines’ growing role in the global nickel supply chain.

The Philippines achieved remarkable performance in nickel ore exports during Q1 2025, with export revenue showing significant growth despite the challenge of declining international base metal prices. According to data from the Philippine Statistics Authority (PSA), the export value of nickel ore and its concentrates from the country increased substantially YoY, indicating sustained global market demand for its resources. Among these, China continued to be the largest importer of Philippine nickel ore, followed by Indonesia. Additionally, the total export volume also showed an upward trend, suggesting a further consolidation of the Philippines' position in the global nickel supply chain.

[5.12 Morning Meeting Minutes] Base metal prices generally rose on Monday as news emerged of substantive progress in trade negotiations between the US and China, alleviating concerns about a global recession to some extent. Another reason for the outstanding performance of nickel prices was the rumor that the Philippines planned to implement a ban on nickel ore exports starting next month, which could potentially lead to a shortage in nickel ore supply. However, SMM analysis suggests that the short-term impact on the nickel market may stem more from sentiment, and it may be difficult for this policy to have a fundamental impact on the nickel industry in the short term.

SMM Nickel News on May 12: Macro News: (1) The high-level China-US economic and trade talks were held in Geneva, Switzerland, from May 10 to 11. He Lifeng, the Chinese head of the China-US economic and trade talks and Vice Premier of the State Council, stated at a press conference held by the Chinese delegation on the evening of May 11 local time that the talks were frank, in-depth, and constructive, with important consensus reached and substantive progress made. Both sides agreed to establish a China-US economic and trade consultation mechanism. China and the US will finalise the relevant details as soon as possible and release a joint statement on the talks on May 12. (2) After Powell reiterated last week that the US Fed would adopt a wait-and-see approach towards easing monetary policy, traders significantly adjusted their bets, expecting the benchmark interest rate to fall by less than 75 basis points (≤three interest rate cuts) in 2025, with the first interest rate cut not expected to occur until July at the earliest. Fed Chairman Powell had previously stated that due to President Trump's across-the-board tariff hikes, the risks of rising inflation and unemployment had intensified while policymakers sought greater clarity on trade policies. Of course, whether this expectation holds true will depend on the performance of US economic and inflation data in the coming weeks. Details of the China-US trade negotiations over the weekend and the consumer price index released on Tuesday may still prompt investors to re-evaluate their latest views. Spot Market: Today, the SMM 1# refined nickel price is 125,900-128,550 yuan/mt, with an average price of 127,225 yuan/mt, up 2,400 yuan/mt from the previous trading day. The mainstream spot premium quotation range for Jinchuan No.1 nickel is 2,000-2,300 yuan/mt, with an average premium of 2,150 yuan/mt, down 150 yuan/mt from the previous trading day. The premiums and discounts quotation range for Russian nickel is 0-300 yuan/mt, with an average premium of 150 yuan/mt, unchanged from the previous trading day. Futures Market: The most-traded SHFE nickel contract (NI2506) staged a strong rebound, opening at 124,150 yuan/mt and closing at 125,930 yuan/mt as of 11:30, up 1.84%. In terms of inventory, LME nickel inventory decreased by 642 mt to 197,670 mt on May 9, while domestic SHFE warrants decreased by 867 mt to 27,808 mt, with both SHFE and LME inventories experiencing destocking. Base metal prices generally rose on Monday as news of substantive progress in the trade negotiations between the US and China emerged, alleviating concerns about a global recession to some extent. Another reason for nickel's outstanding performance was the rumor that the Philippines planned to implement a ban on nickel ore exports starting next month, which could potentially lead to a shortage in nickel ore supply. However, SMM analysis suggests that the short-term impact on the nickel market may be more sentiment-driven, and the policy is unlikely to have a fundamental impact on the nickel industry in the short term.

On Tuesday, April 15, JPMorgan stated that it has turned bearish on base metal prices in the short term.

【4.15 Morning Meeting Minutes】Due to the reduction of high-grade nickel in Indonesia, the market demand for MHP increased, driving the continuous rise of the MHP coefficient. Recent floods in Indonesia led to a decrease in MHP supply, further pushing up the MHP quotation coefficient. On the LME nickel front, prices continued to decline recently due to US tariff policies. The overall production costs of nickel salt smelters pulled back. Supply side, this week, based on reduced production costs, some nickel salt smelters lowered their quotations.

On Thursday, April 10, copper and other base metals on the London Metal Exchange (LME) rebounded sharply as trade concerns eased. At 17:00 London time (00:00 Beijing time on April 11), LME three-month copper closed up $375, or 4.35%, at $8,988/mt. According to Securities Times, US President Trump announced on Wednesday a 90-day suspension of "reciprocal tariffs" on dozens of countries. This initially provided a boost to financial markets, but major stock indices subsequently declined. Carsten Menke, an analyst at Julius Baer in Zurich, said, "This is just a typical knee-jerk reaction in financial markets." The weakening US dollar provided additional support to base metal prices on Thursday, as the US consumer price index unexpectedly fell in March, marking the first monthly decline in nearly five years, extending the dollar's decline. A softer dollar makes dollar-denominated commodities cheaper for buyers using other currencies. Among other metals, three-month aluminum closed up $54, or 2.33%, at $2,370/mt. Three-month tin closed up $834, or 2.80%, at $30,658/mt.

On Tuesday, April 8, LME copper futures rose, rebounding from the more than 16-month low hit in the previous trading session. After the sell-off the previous day, base metal prices on the Shanghai Futures Exchange stabilized. As global trade tensions escalated, intensifying concerns about an economic downturn, market participants adopted a wait-and-see attitude. LME three-month copper rose 0.8% to $8,803 per mt, after falling to $8,105 per mt the previous day, the lowest level since November 2023. The most-traded cu2505 futures contract on the Shanghai Futures Exchange fell 1.33% to 7,330 yuan per mt, hovering near a three-month low since January 3. It fell 7% at the opening on Monday. SHFE aluminum rose 0.74% to 19,690 yuan per mt, SHFE zinc fell 0.6% to 22,255 yuan per mt, SHFE lead fell 0.81% to 16,585 yuan per mt, SHFE nickel fell 0.08% to 119,190 yuan per mt, and SHFE tin fell 1.3% to 267,410 yuan per mt. A base metal trader said, "Prices seem to have stabilized today after a sharp drop yesterday, and people are taking a wait-and-see attitude as tariffs continue to evolve." Among other metals, LME three-month aluminum rose 0.4% to $2,379 per mt, three-month lead rose 0.5% to $1,879 per mt, three-month zinc rose 0.1% to $2,617 per mt, three-month tin fell 0.6% to $33,725 per mt, and three-month nickel rose 1.5% to $14,580 per mt.