This week, nickel prices showed a slight upward trend. In the spot market, the average price of SMM1# refined nickel rose from 122,850 yuan/mt at the beginning of the week to 123,400 yuan/mt, marking a 0.4% increase. The premium for Jinchuan nickel remained within the range of 2,300-2,600 yuan/mt this week, with relatively small changes. Affected by the stable fluctuations in nickel futures prices and weak downstream demand, trading in the spot refined nickel market was sluggish this week. In the futures market, the most-traded SHFE nickel contract (NI2507) closed at 122,200 yuan/mt, up 0.93%. LME nickel prices outperformed the domestic futures market, closing at $15,495/mt this week, up 1.24%. On the macro front, the US ADP employment figure for May increased by 37,000, the lowest level since March 2023 and far below the expected 114,000. The previous figure was 62,000. This number was 5 standard deviations away from the expected value, representing the largest miss since August 2022. Following the data release, investors' expectations for future interest rate cuts rose sharply. Domestically, to maintain ample liquidity in the banking system, the People's Bank of China (PBOC) will conduct 1,000 billion yuan of outright reverse repo operations this week through fixed-quantity, rate-based tenders with multiple price awards, with a term of 3 months (91 days). In terms of inventory, the inventory in the Shanghai Bonded Zone was approximately 5,000 mt this week, unchanged WoW. Domestic social inventory stood at around 39,400 mt, experiencing destocking of approximately 2,178 mt WoW. Domestic inventory fell below the 40,000 mt level, alleviating inventory pressure. This week, nickel prices stabilized amid fluctuations, with cost support and policy expectations providing underlying resilience. However, inventory pressure stemming from the surplus in the fundamental market still constrained upside room. A breakthrough in the market outlook will depend on clarity in Indonesia's nickel ore policies or unexpected supply-side contractions. In the short term, the lower bound of fluctuations is seen at 115,000 mt, while the upper bound faces pressure at 123,000 mt.

The sharp fluctuations in nickel prices in May were mainly due to macro disturbances. After excluding abnormal disturbances in the candlestick, SHFE nickel futures prices mainly showed a slow decline under the dual pressures of "weak fundamentals" and "high inventory".

[Summary of the Morning Meeting on May 30] Affected by the inventory of some raw materials and weak order demand, during the traditional procurement period this week, the inquiry and transaction activity of precursor enterprises for nickel salts were both low. Supply side, the order signing situation for nickel salt producers in June was poor this week, and some large nickel salt enterprises planned to carry out shutdown maintenance work in June. Given the weak demand coupled with falling costs, some nickel salt producers have shown signs of loosening their quotes.

SMM Nickel News on May 29: Macro News: (1) The US Court of International Trade ruled on Wednesday local time that US President Trump did not have the authority to impose a blanket tariff on nearly all countries, thereby declaring the "Emancipation Day" tariff measure on April 2, which triggered a global trade war and could have upended the world economy, legally invalid. The Court of International Trade in Manhattan, New York, stated that the US Constitution grants the US Congress the exclusive power to regulate trade with other countries, and that the emergency powers claimed by the President to protect the US economy do not override these powers. (2) He Lifeng, member of the Political Bureau of the CPC Central Committee and Vice Premier of the State Council, met with Dan Simkowitz, Co-President of Morgan Stanley, at the Great Hall of the People on the 28th. He Lifeng stated that China is committed to promoting high-quality development through high-level opening-up, which will energize and add momentum to both the Chinese and global economies. He welcomed more US financial institutions, including Morgan Stanley, and long-term capital to continue deepening mutually beneficial cooperation with China and actively participating in the construction and development of China's capital market. Simkowitz expressed his delight at the substantive progress made in the US-China economic and trade talks, stating that Morgan Stanley would continue to deepen its presence in the Chinese market and provide high-quality services to promote investment cooperation between US and Chinese enterprises. Spot Market: Today, the SMM 1# refined nickel price is 120,000-123,050 yuan/mt, with an average price of 121,525 yuan/mt, a decrease of 1,725 yuan/mt from the previous trading day. The quotation range for the mainstream spot premiums of Jinchuan #1 refined nickel is 2,300-2,700 yuan/mt, with an average premium of 2,500 yuan/mt, an increase of 300 yuan/mt from the previous trading day. The premiums and discounts quotation range for Russian nickel is 100-400 yuan/mt, with an average premium of 250 yuan/mt, unchanged from the previous trading day. Due to the significant drop in SHFE nickel futures prices yesterday, trading volume in the afternoon spot market was active, with the premium range at 2,200-2,500 yuan/mt. Today, there is less refined nickel circulating in the market, and premiums have risen significantly. Futures Market: The most-traded SHFE nickel contract (NI2507) plummeted sharply yesterday, closing at 119,950 yuan/mt, a daily decline of 2.1%. The cumulative weekly decline reached 3.2%, breaking through the key support level of 120,000 yuan/mt. The night session continued to probe the bottom, touching a low of 118,630 yuan/mt. Prices rebounded somewhat in the morning session today, returning to the 120,000 yuan/mt level, but still remained in the doldrums. As of 11:30, the closing price was 120,340 yuan/mt, up 0.72%. In the medium and long-term, the contradiction of global nickel overcapacity remains unresolved, with the nickel market under triple pressure of "high supply, weak demand, and tight funds". The short-term oscillation bottom is seen at 115,000 yuan/mt, with the top under pressure at 123,000 yuan/mt.

On Friday evening, LME copper opened at $9,375.5/mt. It initially dipped to $9,350/mt, fluctuated considerably during the session, hitting a high of $9,401.5/mt, and closed at $9,360/mt after continued fluctuations, marking a 1% decline.

【Summary of Morning Meeting on April 24】Last week, nickel prices continued the volatile pattern seen since mid-April. The average price of SMM1# refined nickel last week was 126,850 yuan/mt, up slightly by 0.5% WoW. LME nickel futures prices fluctuated rangebound around $15,600-15,800/mt. Expectations for US Fed interest rate hikes in June increased, putting pressure on LME nickel prices denominated in US dollars. Risk-averse sentiment among investors was pronounced, and the tug-of-war between longs and shorts in the market intensified.

Nickel prices continued to fluctuate this week, with inventory remaining at a high level. Nickel prices maintained the fluctuation pattern since mid-April, with the average price of SMM1# refined nickel at 126,850 yuan/mt, up 0.5% WoW. Inventory-wise, the Shanghai Bonded Zone inventory stood at around 5,800 mt, flat WoW, while the domestic social inventory was approximately 44,700 mt, with an inventory buildup of about 701 mt WoW. The high inventory level continues to suppress the upside room for nickel prices to some extent.

Last Friday night, LME copper opened at $9,794/mt, with the highest price reaching $9,887.0/mt and the lowest price dropping to $9,773.0/mt.

[3.17 Morning Meeting Minutes] Last week, nickel prices showed a trend of fluctuating and strengthening, with spot prices fluctuating between 128,600 and 133,300 yuan/mt, while SHFE nickel futures prices (2505 contract) fluctuated between 128,250 and 132,000 yuan/mt. On the macro front, the Indonesian government plans to increase the nickel ore tax rate to 14%-19%, and the market generally expects that the implementation of the policy will increase the cost of nickel ore and nickel pig iron, providing some support for nickel prices in the short term.

Nickel prices fluctuated and strengthened amid policy disturbances in Indonesia, still grappling with surplus pressure. This week, nickel prices showed a fluctuating upward trend. The spot price fluctuated between 128,600 and 133,300 yuan/mt, while the SHFE nickel futures price (2505 contract) ranged from 128,250 to 132,000 yuan/mt.