SMM

Last week, nickel prices rebounded from the bottom. The macroeconomic forecast for the US in September mainly revolves around the US Fed's rate cut expectations. Currently, the likelihood of a rate cut is quite high, but the specific extent remains uncertain. Overall, a rate cut would have a relatively positive impact on the US economy. The refined nickel market is currently in a surplus situation, and with the expectation of weakening exports, domestic inventories may continue to accumulate. This means that supply-side pressure may continue to suppress nickel prices. Although the demand for nickel in the electric vehicles market continues to grow, the current global economic situation and market pessimism may have some impact on demand. Additionally, the weakness in the stainless steel market will also drag down nickel prices. Indonesia, a major global nickel ore producer, has significant influence on the global nickel market through its policy changes. Recently, the Indonesian nickel ore market has been under pressure, with the September reference price down 5.38% MoM, reflecting the current weak state of the nickel ore market. The instability of the global macroeconomic environment, such as changes in the US Fed's rate hike policy and the risk of economic recession in Europe and the US, could indirectly affect nickel prices. Based on the above analysis, we believe that nickel prices may continue to be under pressure in September. Under the combined effects of supply surplus, weak demand, and external unfavourable factors, nickel prices may continue to be suppressed. However, the specific price trend still needs to closely monitor market dynamics and related policy changes. In summary, nickel prices are likely to fluctuate downward in the short term due to fundamental pressures, but it is still necessary to be vigilant about the resurgence of macro sentiment. The upcoming US Fed meeting on Sep 18 should be closely watched.