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.

Copper prices rose initially then pulled back this week. Early in the week, a pullback in the US dollar and escalating US-Iran tensions pushed LME copper to $13,400/mt and SHFE copper above 103,000 yuan/mt. However, better-than-expected US non-farm payrolls, a drop in the unemployment rate, and US Fed officials emphasizing persistent high inflation later cooled expectations for interest rate cuts. The US dollar stabilized and rebounded, triggering concentrated profit-taking by bulls and a rapid price decline. Approaching the Chinese New Year, capital turned cautious. Domestic demand was already weak, and high prices further dampened procurement, amplifying the adjustment. Ore supply disruptions persist but are unlikely to cause substantial production cuts in the short term. Fundamentals, the spot market was sluggish this week as the Chinese New Year holiday neared. Both LME and SHFE copper showed deep contango structures, boosting traders' sentiment for stockpiling and arbitrage. Consequently, domestic and import premiums edged down only slightly. Holiday effects emerged on the demand side, with downstream stocking largely completed and procurement sentiment turning increasingly mediocre. Post-holiday outlook, a significant inventory buildup is expected during the holiday, keeping overall copper prices under pressure. LME copper is forecast to fluctuate between $12,800-13,400/mt, while SHFE copper is seen moving between 98,000-103,000 yuan/mt. Spot side, on the first trading day after the holiday, spot prices against the SHFE copper front-month contract are expected to show a high premium due to SMM's consistent pricing against the front-month contract and the price spread between futures contracts, but this is expected to correct on the second day. Spot prices against the SHFE copper front-month contract are anticipated to range from a discount of 300 yuan/mt to a premium of 200 yuan/mt.

[Non-Farm Payrolls Data Exceed Expectations, SHFE and LME Zinc Prices Pull Back] At the beginning of the week, the gradual digestion of macro sentiment led to a decline in LME zinc; however, continued destocking of overseas LME zinc inventory provided bottom support for prices. Subsequently, as the market continued to await the delayed release of non-farm payrolls and CPI data, trading activity became more cautious, and LME zinc maintained a fluctuating trend.

SMM data showed that during the week (February 9-13, 2026), the final trading week before the Chinese New Year holiday, the stainless steel market essentially entered a "market closure" mode, with price movements primarily driven by capital flows in the futures market. The most-traded contract officially switched to SS2604, and as of 10:30 on February 13, the contract was quoted at 13,765 yuan/mt. Affected by pre-holiday capital outflows, trading in the futures market was sluggish, and the price center fluctuated rangebound within the range of 13,700-13,800 yuan/mt. Despite the lack of immediate guidance from the spot market, an unexpected rebound in raw material prices provided strong support at the bottom for the futures market, limiting the downside room during the vacuum period. From a macro perspective, policy signals from China and the US set the tone for the post-holiday macroeconomic backdrop. Domestically, the central bank released its monetary policy report, clearly stating the continuation of moderately accommodative policies and maintaining ample liquidity to provide support for the post-holiday economic recovery. Overseas, US non-farm payrolls increased by 130,000 in January, and the unemployment rate fell to 4.3%. The strong economic data significantly reduced the probability of a near-term interest rate cut by the US Fed (the probability of a March rate cut was less than 20%). The expectation that "tight monetary conditions will persist longer" exerted some downward pressure on commodity valuations. However, during the extended Chinese New Year holiday, the market focused more on the cumulative effects of domestic policies and the resilience of post-holiday demand recovery. From a fundamental perspective, the spot market had fully entered the holiday mode, with inventories showing a seasonal buildup. The latest SMM data showed that social inventory rose to 894,500 mt this week, an increase of 25,900 mt compared to 868,600 mt last week. This inventory buildup aligns with the seasonal pattern around the Chinese New Year, primarily due to downstream end-user shutdowns and the stagnation of goods circulation. Regarding spot transactions, the vast majority of traders had already left for the holiday, with only a small number of post-holiday orders being locked in, leaving the market in a frozen state characterized by "existing prices but no market." Although inventories increased noticeably, considering the previously low inventory base, the total volume remains within a reasonable range. Furthermore, the market generally holds an optimistic outlook for the post-holiday "Golden March, Silver April" peak season. Suppliers maintained a steady mindset, with no signs of panic selling pressure emerging. The "counter-trend rebound" on the cost side was the highlight of the week. Against the backdrop of stalled finished product trading, raw materials showed unexpected resilience. As of February 13, the price of high-grade NPI rebounded to 1,051.5 yuan/mtu, up 11.5 yuan WoW, recouping some of the previous losses; high-carbon ferrochrome held steady at 8,550 yuan/mt (50% metal content). The recovery in raw material prices was supported, on one hand, by continued expectations regarding Indonesian ore policy and, on the other hand, reflected upstream optimism about post-holiday demand. The upward shift in the cost center directly raised the break-even point for steel mills, building a more solid cost floor for stainless steel prices upon their return after the holiday. Overall assessment: This week's market exhibited a typical "pre-holiday closing" pattern, with capital outflows leading to reduced volatility and a spot market shutdown causing distortions in the spot-futures price spread. Although the 894,500 mt inventory confirmed an inventory buildup trend, the rebound in NPI indicates that the industrial fundamentals have not deteriorated. Looking ahead to the post-holiday market, the core focus of market dynamics is expected to quickly shift from "capital risk aversion" back to "supply-demand verification." As the peak season of "Golden March, Silver April" approaches, the market holds strong expectations for a demand recovery. If the post-holiday inventory buildup remains within a controllable range, coupled with raw material cost support above 1,050 yuan per mtu, stainless steel is poised to get off to a good start or experience a stabilization and rebound.

Today, the most-traded BC copper 2603 contract opened at 92,420 yuan/mt, hit an intraday high of 92,420 yuan/mt at the beginning of the session, then fluctuated downward with its center touching a low of 90,440 yuan/mt. Copper prices later maintained a sideways fluctuating trend, finally closing at 90,840 yuan/mt, up 0.43%. Open interest fell to 3,481 lots, down 1,004 lots from the previous trading day, while trading volume rose to 6,479 lots, up 3,066 lots from the previous trading day. On the macro front, US non-farm payrolls added 130,000 in January, and the unemployment rate dropped to 4.3%, both figures beating expectations, cooling market expectations for interest rate cuts. US Fed officials struck a hawkish tone, favoring maintaining restrictive interest rates, while Trump continued to pressure the Fed. Armed attacks in Papua, Indonesia targeted a Freeport company convoy, resulting in 1 death and 2 injuries, raising safety risks at the mine. On the fundamentals side, supply side, due to earlier import arbitrage windows opening, locked price ratio cargoes continued to arrive, keeping supply loose. Demand side, as the holiday approaches, downstream enterprises have generally started holidays, leading to continuously weakening procurement demand. Inventory side, as of Thursday, February 12, SMM nationwide copper inventories in mainstream areas increased 5.3% WoW, with total inventories up 27,400 mt YoY. SHFE copper 2603 contract closed at 102,330 yuan/mt. Based on the BC copper 2603 contract price of 90,840 yuan/mt, its post-tax price is 102,649 yuan/mt, resulting in a price spread of -319 between SHFE copper 2603 and BC copper. The spread remained inverted and narrowed compared to the previous day.