SMM Nickel News May 25: Macro and market news: (1) Waller was sworn in, emphasizing that the US Fed will be "reform-oriented"; US Fed Governor Waller: The current stance is to keep rates stable in the near term. If inflation expectations become unanchored, rate hikes will be needed. (2) The PBOC announced that to maintain ample liquidity in the banking system, on May 25, 2026, the People's Bank of China will conduct a 600 billion yuan MLF operation with a fixed quantity, rate tender, and multiple-price winning method, with a tenor of 1 year. Spot market: On May 25, SMM #1 refined nickel prices rose 500 yuan/mt from the previous trading day. Spot premiums: Jinchuan #1 refined nickel averaged 1,150 yuan/mt, down 100 yuan/mt from the previous trading day, while domestic mainstream brand electrodeposited nickel ranged from -400 to 500 yuan/mt. Futures market: The most-traded SHFE nickel 2606 contract moved sideways in a narrow range during the morning session, closing at 143,810 yuan/mt, up 0.23%. Global visible inventory of refined nickel remains at high levels, and weak consumption is unable to quickly digest the surplus inventory. Nickel prices lack upward momentum, and the most-traded SHFE nickel contract is expected to move sideways within the range of 140,000-150,000 yuan/mt.

[SMM Stainless Steel Daily Review] SS Futures Strengthened, Stainless Steel Spot Prices Remained Firm with Inquiries and Transactions Boosted SMM, May 25: SS futures continued to hold up well. Driven by the overall strength of non-ferrous metal futures and SHFE nickel, SS futures rose in tandem. As of the midday close, the most-traded SS contract was quoted at 14,805 yuan/mt. In the spot market, buoyed by the slight uptick in futures, spot quotes remained firm, with both market inquiries and transaction activity improving. However, the current macro environment still carried significant uncertainties, steel mill production schedules stayed high, and the traditional off-season was gradually approaching, intensifying industry participants' concerns about the market outlook. The most-traded SS contract held up well. At 10:15 AM, SS2605 was quoted at 14,860 yuan/mt, up 60 yuan/mt from the previous trading day. Spot premiums for 304/2B in the Wuxi area were in the range of 310-710 yuan/mt. In the spot market, the average price of cold-rolled 201/2B coils in Wuxi remained stable with a downward bias; for cold-rolled trimmed-edge 304/2B coils, Wuxi remained stable and Foshan's average price held steady; cold-rolled 316L/2B coils in the Wuxi area fell 50 yuan/mt; hot-rolled 316L/NO.1 coils in Wuxi dropped 175 yuan/mt; cold-rolled 430/2B coils in both Wuxi and Foshan remained stable. This week, the stainless steel market saw both futures and spot prices fluctuate within a stable range. Futures movements were mainly driven by industry news and expectations, with limited overall fluctuations. Market sentiment was divided — traders held a cautious stance, but downstream end-user just-in-time procurement remained resilient. Combined with traders' active shipments, market supply continued to be absorbed, with the overall situation showing...

SMM Morning Meeting Minutes: Last Friday evening, LME copper opened at $13,624.5/mt. In the early session, it experienced wild swings and dipped to $13,575.5/mt. Subsequently, the center of copper prices shifted upward, reaching a high of $13,678/mt, before fluctuating downward to finally close at $13,635/mt, up 0.18%. Trading volume reached 16,200 lots, and open interest stood at 269,000 lots, a decrease of 3,435 lots from the previous trading day, indicating bears reducing positions. Last Friday evening, the most-traded SHFE copper 2607 contract opened at 104,870 yuan/mt. In the early session, the center of copper prices fluctuated downward, touching a low of 104,420 yuan/mt. Subsequently, it fluctuated upward, reaching 105,280 yuan/mt, before moving sideways to finally close at 105,090 yuan/mt, up 0.58%. Trading volume reached 33,600 lots, and open interest stood at 172,000 lots, an increase of 627 lots from the previous trading day, indicating bulls adding positions.

[Geopolitical Risks Cool at the Margin; LME Outperforms SHFE Pattern in Aluminum Market Remains Unchanged] On the fundamentals side, the supply gap outside China and low inventory continue to provide bottom support. However, elevated inventory levels in China remain the core factor suppressing significant price rallies. Additionally, weak trading performance in the spot market further limits the upside room for aluminum prices. In the short term, aluminum prices are expected to continue the pattern of LME outperforming SHFE, fluctuating at highs.

[SMM Morning Meeting Minutes: China's Tin Market Overall Shows a Pattern of Weak Supply and Demand; Consumption End Has Limited Acceptance of High Prices]

SMM May 23: Metals market: Last Friday's overnight domestic market saw base metals mostly rise. SHFE copper rose 0.58%. SHFE aluminum fell 0.14%, SHFE lead rose 0.3%. SHFE zinc fell 0.16%. SHFE tin rose 1.09%. SHFE nickel rose 0.49%. In addition, the most-traded alumina futures contract fell 0.77%, and the most-traded foundry aluminum futures contract fell 0.06%. Last Friday's overnight ferrous metals mostly fell. Iron ore was flat at 792.5 yuan/mt, stainless steel rose 0.34%, rebar edged down 0.09%, and hot-rolled coil fell 0.15%. Coking coal and coke: coking coal continued to fall for the third consecutive trading day, down 1.45%, and coke fell 0.95%. Last Friday's overnight overseas metals market saw LME base metals rise across the board. LME copper rose 0.18%. LME aluminum rose 0.45%, LME lead rose 0.4%. LME zinc edged up 0.06%. LME tin rose 1.16%. LME nickel rose 0.67%. Last Friday's overnight precious metals : COMEX gold fell 0.7%, posting a second consecutive weekly decline with a 1.13% weekly drop; COMEX silver fell 1.06%, falling for two consecutive weeks with a 2.1% weekly drop. Last Friday's overnight SHFE gold most-traded contract fell 0.1%, posting a second consecutive weekly decline with a 2.13% weekly drop; SHFE silver most-traded contract rose 0.51%, but SHFE silver fell for two consecutive weeks with a 7.81% weekly drop. As of 8:31 am on May 23, last Friday's overnight closing prices: Macro front China: [PBOC: 600 billion yuan MLF operation to be conducted on May 25] PBOC: To maintain ample liquidity in the banking system, on May 25, 2026, the People's Bank of China will conduct a 600 billion yuan MLF operation with a fixed quantity, interest rate tender, and multiple-price winning method, with a maturity of 1 year. [CSRC: Crackdown on illegal cross-border securities business; investors' property safety unaffected by the rectification] Xinhua News Agency reported that recently, with the approval of the State Council, the CSRC and seven other departments jointly issued the "Implementation Plan for Comprehensive Rectification of Illegal Cross-border Securities, Futures, and Fund Business Activities." Regarding this rectification, all parties are highly concerned about how the legitimate rights and interests of existing investors will be protected. In this regard, the plan emphasized that investors' property safety will not be affected by the rectification. A CSRC official said the plan specified numerous measures to safeguard the legitimate rights and interests of existing investors. For example, a 2-year concentrated rectification period will be set to phase out relevant domestic services of overseas institutions. Overseas institutions are required to properly communicate with investors affected by rectification measures in China and arrange account disposal to ensure client property safety. [Hong Kong SFC: Enhanced measures to address forged documents and money laundering risks and raise account opening standards] The Hong Kong SFC issued a circular on May 22, setting out the monitoring measures that should be implemented when opening accounts and maintaining customer relationships. The circular was issued following the SFC's review of account opening practices at 12 securities brokerages. The review identified multiple significant deficiencies, including inadequate due diligence on account opening documents, acceptance of suspicious or forged documents during the account opening process, and weaknesses in managing cross-border agency relationships with ex-China intermediaries. (Wallstreetcn) US dollar: Last Friday, the overnight US dollar index rose 0.12% to 99.32. On a weekly basis, the US dollar index posted its second consecutive weekly gain, up 0.04% for the week. The 17th Fed Chairman Warsh was sworn in at the White House on Friday. Warsh stated: "The Fed's mission is to promote price stability and full employment." He said, "When these goals are pursued with wisdom and clarity, independence and resolve, inflation can be lower, economic growth can be stronger, real take-home wages can be higher, America can be more prosperous, and just as importantly, America's standing in the world can be more secure." He added: "To fulfill this mission, I will lead a reform-oriented Fed that learns from past successes and mistakes, breaking free from static frameworks and models while adhering to clear standards of integrity and performance." (Jin10 Data) Fed Governor Waller's hawkish remarks put US Treasury prices under pressure, with money markets fully pricing in a 25-basis-point interest rate hike in 2026. The most significant policy signal on Friday came from Fed Governor Waller. On Friday local time, Fed Governor Waller stated that as the energy shock from the Iran war pushes up prices, he supports making it clear that the Fed's next rate move is as likely to be a hike as an interest rate cut. Waller said his current stance is to remain patient and keep rates unchanged until the impact of the war becomes clearer, but he warned on Friday that he does not rule out the possibility of future rate hikes if inflation does not begin to slow down soon. Waller's remarks were released almost simultaneously with the swearing-in of new Fed Chairman Warsh. The interest rate environment Warsh currently faces is notably more hawkish than the Fed's internal dot plot expectations. (Wall Street CN) "Fed whisperer" Nick Timiraos noted that there were several key moments during Kevin Warsh's swearing-in ceremony at the White House: ① Trump asked Warsh to be "completely independent." Trump said, "(I hope he) doesn't look at me, doesn't look at anybody." ② Just two minutes later, Trump offered some "suggestions" indicating the economic direction he hoped to see: "Strong economic growth doesn't need to be cooled down," "Economic growth does not mean inflation," and "I want the economy to boom to unprecedented levels, because there is indeed some debt to deal with." ③ Trump hinted that the US Fed's decision-making body would "converge." He said other Fed policymakers "will make their own decisions, but they will listen to Kevin throughout," even those "whose positions are slightly different." ④ Warsh referenced Greenspan, not Bernanke. Warsh recalled the historical scene of Greenspan being sworn in at the White House in 1987, and pledged to "begin work with abundant energy and a sense of mission, just as Chairman Greenspan did." He made no mention of former Chairman Bernanke, with whom he had worked for five years during his previous tenure as a governor. (Jin10 Data) In addition, affected by the Iran war, the US consumer confidence index in May fell to a historic low, and long-term inflation expectations also deteriorated significantly. Data showed that the University of Michigan's final reading of the May consumer confidence index dropped to 44.8, with consumers expecting prices to rise at an annualized rate of 3.9% over the next five to ten years, up from 3.5% in April and hitting a seven-month high. They also expected prices to rise 4.8% over the next year. Gasoline prices continued to hover near their highest levels since 2022, exacerbating Americans' concerns about rising living costs and the failure to reach a deal to end the war. The impact of inflation on household budgets, particularly for low-income consumers, poses risks to the future consumption outlook. Joanne Hsu, the survey director, stated: "Cost of living concerns remain the top issue on people's minds, with 57% of respondents spontaneously citing that high prices are eroding their personal finances, up from 50% last month." She stated: "The key point is that consumers appear worried that inflation will not only spread beyond fuel prices to other areas, but that this upward trend could persist well into the future." (Jin10 Data) Regarding other currencies: ECB President Lagarde stated that despite the deepening impact of the Iran conflict, long-term inflation expectations remained broadly in line with the 2% target. Although the energy crisis is pushing up inflation and dragging down the economy, long-term inflation expectations have remained well-anchored overall. The impact of this conflict on medium-term inflation and economic activity will depend on the intensity and duration of the energy price shock, as well as the scale of its indirect transmission effects. (Wall Street Journal) Bank of Japan Governor Ueda Kazuo said that Prime Minister Takaichi Sanae told him during their meeting on Friday that she hoped the BOJ would adopt appropriate policies, taking into account the government's price measures. Ueda Kazuo told reporters after the meeting with Takaichi Sanae at the Prime Minister's residence in Tokyo that it was a routine meeting between the two and that no specific details of monetary policy were discussed. (Wall Street Journal) On the macro front: Data to be released this week include the UK May CBI retail sales balance, US March FHFA house price index MoM, US March S&P/CS 20-city non-seasonally adjusted house price index YoY, US May Conference Board consumer confidence index, US May Dallas Fed business activity index, Australia April non-seasonally adjusted CPI YoY, New Zealand RBNZ interest rate decision through May 27, Switzerland May ZEW investor confidence index, US weekly ADP employment change for the week ending May 9, US May Richmond Fed manufacturing index, Eurozone May industrial confidence index, Eurozone May economic sentiment index, Canada Q1 current account, US initial jobless claims for the week ending May 23, US April core PCE price index YoY, US April personal spending MoM, US Q1 real GDP annualized QoQ revised, US April core PCE price index MoM, US April durable goods orders MoM, US April new home sales annualized, Japan April unemployment rate, France May CPI MoM preliminary, France Q1 GDP YoY final, Germany May seasonally adjusted unemployment change, Germany May seasonally adjusted unemployment rate, Germany May CPI MoM preliminary, Canada March GDP MoM, US May Chicago PMI, and China May official manufacturing PMI. In addition, other events to watch this week include: 500 billion yuan in 1-year medium-term lending facility (MLF) and 1 billion yuan in 7-day reverse repo maturing today; BOJ Governor Ueda Kazuo delivering a speech at a monetary policy conference hosted by the BOJ; the RBNZ releasing its interest rate decision and monetary policy statement; RBNZ Governor Breeman holding a monetary policy press conference; the ECB publishing the minutes of its April monetary policy meeting; permanent FOMC voter and New York Fed President Williams delivering a keynote speech at a conference co-organized by the Central Bank of Iceland; 2028 FOMC voter and St. Louis Fed President Musalem delivering a speech; Bank of England Governor Bailey delivering a speech; 2028 FOMC voter and Kansas City Fed President Schmid delivering a speech; and US Fed Governor Bowman delivering a speech. In addition, it is worth noting that due to the Memorial Day holiday, the US stock market will be closed for one day on May 25 (Monday). Trading of precious metals and WTI crude oil futures contracts under CME will end early at 02:30 Beijing time on May 26, and trading of US equity and Treasury futures contracts will end early at 01:00 Beijing time on May 26. Due to the Buddha's Birthday holiday, the Hong Kong stock market will be closed for one day on May 25 (Monday), with Southbound and Northbound trading suspended. The South Korean stock market will also be closed for one day on the same date. In addition, due to the Spring Bank Holiday, the UK stock market will be closed for one day on May 25 (Monday). Trading of Brent crude oil futures contracts under ICE will end early at 01:30 Beijing time on May 26. Investors are advised to take note. (Jin10 Data) The overseas market exchange closure schedule is as follows (all in Beijing time): Crude oil: Both oil futures rose during the overnight session last Friday, with WTI up 0.67% and Brent up 1.62%. On a weekly basis, WTI futures declined 3.98% for the week, and Brent futures declined 4.59% for the week. Since the ceasefire agreement was reached in April this year, US-Iran negotiations have remained deadlocked, with no comprehensive agreement to end the conflict in sight. Although a draft reportedly "close to being finalized" has been emerging, four core obstacles still stand in the way of lasting peace. According to Bloomberg, the Strait of Hormuz, nuclear issues, the Lebanon conflict, and sanctions currently constitute the four core points of divergence in the negotiations. For investors, this war has plunged global energy markets into severe turbulence, and any progress or breakdown in negotiations will have an impact on commodity prices. (Wallstreetcn) Iranian Foreign Ministry spokesperson Baghaei stated on May 22 that it was premature to say a US-Iran agreement was close to being reached, as significant differences remained between the two sides. According to Iranian media reports on May 22, Baghaei, commenting on the visit of senior Pakistani officials to Tehran, said it indicated that the current situation had entered a "turning point or decisive stage." He mentioned that Pakistan's Chief of Army Staff Munir had visited Tehran and that related communications were still ongoing. When asked whether this meant a change in the negotiation process, Baghaei said it could not be said that a US-Iran agreement was close to being reached, as there were serious and wide-ranging differences between the US and Iran, and "diplomacy is a time-consuming process." Baghaei added that one should not expect to see results within weeks or months through several rounds of back-and-forth consultations. He emphasized that diplomatic negotiations are inherently a long-term process, and both sides are utilizing various opportunities to convey their respective positions. (Xinhua) Baker Hughes data showed that US drilling companies increased the number of oil and natural gas rigs for the fifth consecutive week. The total US oil rig count for the week ending May 22 was 425, compared to the previous reading of 415. In addition, Kazakhstan's national oil and gas company reported that Q1 oil production fell 12% YoY to 5.6 million mt. (Jin10 Data) According to Bloomberg, affected by the Iran war, the national average gasoline price in the US has surpassed $4.5 per gallon, with California exceeding $6. Despite high prices, consumers have not significantly reduced fuel purchases. For most Americans, driving to work and picking up children are daily necessities. Gasoline spending is nearly impossible to cut, and consumers can only reduce discretionary spending to balance their budgets. Philadelphia resident Avarisse Crawford said she has cut entertainment expenses, replacing steak dinners and bar outings with free park activities. The ongoing Middle East tensions continue to push oil prices higher. The effective blockade of the Strait of Hormuz has hindered global crude oil transportation, and US gasoline inventory has fallen to its lowest level for the same period since 2014. Morgan Stanley expects it to hit a seasonal historic low by the end of August. Facing persistently climbing oil prices, the Trump administration has successively released strategic petroleum reserves, waived the Jones Act, and discussed implementing a federal gasoline tax holiday, but the effects remain unclear. As the Memorial Day weekend kicks off the summer travel season, upward demand pressure is expected to further strain already tight inventories. (Wallstreetcn) Recommended Reading:

Futures: Overnight, LME lead opened at $2,005/mt and moved sideways during the Asian session. Entering the European session, it first dipped then rallied, touching a low of $1,995/mt before bears reduced positions. LME lead reached a high of $2,015/mt near the close, ultimately settling at $2,013/mt, up 0.4%. Overnight, the most-traded SHFE lead 2607 contract opened at 16,735 yuan/mt, briefly touched a high of 16,780 yuan/mt at the start of the session before moving sideways, and ultimately settled at 16,775 yuan/mt, up 0.24%. On the macro front: Waller was sworn in, emphasizing that the US Fed will be "reform-oriented." US Fed Governor Waller stated that the current stance is to keep interest rates stable in the near term, and that interest rate hikes would be needed if inflation expectations become unanchored. US White House National Economic Council Director Hassett noted that a potential US-Iran deal could lead to a significant drop in energy prices and create room for the US Fed to cut interest rates. China's Ministry of Commerce reported that from January to April, national foreign investment absorption totaled 287.69 billion yuan, down 10.3% YoY. The CSRC and seven other departments jointly issued a document to crack down on illegal cross-border securities, futures, and fund business activities. The PBOC announced that it will conduct a 600 billion yuan MLF operation on May 25, with a tenor of one year. Hong Kong's stock market was closed on Monday, with southbound and northbound trading suspended. : In the Jiangsu, Zhejiang, Shanghai market, warrant quotations remained scarce, and suppliers mainly traded cargoes self-picked up from primary lead smelters. SHFE lead continued to hold up well, and suppliers shipped along with the market. However, some smelters held prices firm on shipments due to limited inventory. Mainstream production areas quoted primary lead at premiums of 0-50 yuan/mt against the SMM #1 lead average price on an ex-factory basis, with a few regions quoting premiums of 150-200 yuan/mt ex-factory. Additionally, as lead prices rebounded, secondary lead losses were repaired, and smelter shipment sentiment improved. Mainstream production areas quoted secondary refined lead at discounts of 50-0 yuan/mt against SMM #1 lead on an ex-factory basis, with a few premiums of 50 yuan/mt still available. However, downstream enterprises had limited rigid demand, especially after lead prices rose, with more downstream enterprises adopting a wait-and-see approach and declining inquiry enthusiasm, resulting in sluggish spot market transactions. Inventory: On May 22, LME lead inventory was unchanged from the previous day at 286,475 mt. As of May 21, SMM lead ingot social inventory across five locations totaled 73,300 mt, an increase of 2,300 mt from May 14. Lead price forecast for today: Lower lead futures prices generated some stocking demand from downstream buyers on dips. Combined with reduced lead imports, this contributed to lead ingot destocking and supported lead prices to rebound after testing lows. Meanwhile, secondary lead enterprises are gradually resuming production, and secondary refined lead transaction prices have shifted to discounts (against the SMM #1 lead average price). The incremental supply is expected to put pressure on the sustainability of subsequent lead ingot destocking, limiting upside room for lead prices. Data Source Statement: All data other than public information is SMM processed data based on public information, market communication, and SMM's internal database model, for reference only and does not constitute decision-making advice.

The US Fed meeting minutes revealed that many policymakers were inclined to abandon the easing bias, with most participants indicating that if inflation remained persistently above the 2% level, it would be necessary to tighten policy. Only a few officials supported future interest rate cuts, and the hawkish tone of the language far exceeded market expectations. Additionally, according to CME data, the market is now pricing in a 60% probability of the US Fed raising interest rates by 25 basis points before year-end, while expectations for interest rate cuts in 2026 have virtually disappeared.

Fed Governor Waller noted that in terms of the US Fed's next interest rate moves, the likelihood of a rate hike and an interest rate cut are roughly equal. If inflation fails to show signs of slowing down quickly, he does not rule out the possibility of subsequent rate hikes. In addition, he indicated that he would support removing the "easing bias" language from the policy statement. Waller also warned that once inflation expectations show signs of becoming unanchored, he would decisively support raising interest rates.

Nickel prices were generally in the doldrums this week. The most-traded SHFE nickel contract moved sideways within the 142,000-147,000 yuan/mt range, pulling back after attempting to test resistance at overhead moving averages. The main bearish factors came from continued inventory buildup, which suppressed bullish sentiment. Wait-and-see sentiment was prevalent in the market, with no clear unidirectional driver. LME nickel prices were similarly in the doldrums within the $18,300-19,000/mt range. Spot market side, the weekly average price of SMM #1 refined nickel was 143,510 yuan/mt, up 350 yuan/mt WoW. Jinchuan nickel premiums remained at 1,000-1,400 yuan/mt this week. Domestic mainstream electrodeposited nickel premiums stayed in the -500-500 yuan/mt range, with no significant change from last week. Spot market transactions returned to a sluggish state this week, mainly because end-users had actively stockpiled during the previous sharp decline in nickel prices. With futures moving sideways this week, downstream willingness to price against futures was low, with just-in-time procurement being the dominant mode. On the macro front, Fed Chairman transition was completed this week, with new Chairman Waller officially taking office. Market expectations for US Fed interest rate cuts were pushed back to H2 2027, with the possibility of rate hikes not ruled out. Meanwhile, the 10-year US Treasury yield remained in the elevated range of approximately 4.35%-4.45% this week, and the US dollar index stayed strong, continuing to weigh on non-ferrous commodity prices. Inventory side, Shanghai Bonded Zone inventory was approximately 1,700 mt this week, flat WoW. Domestic social inventory was approximately 113,000 mt, with an inventory buildup of approximately 1,100 mt WoW. Currently, bullish and bearish forces are balanced, with continued refined nickel inventory buildup being the core factor suppressing nickel prices. In the short term, absent new catalysts, nickel prices are expected to continue moving sideways with wild swings within the 140,000-150,000 yuan/mt range.