Nickel Prices Tumble as Base Metals Sector Outperforms

Nickel prices declined on September 4 as the US-Iran conflict continued and oil prices remained firm at high levels, according to the Shanghai Metals Market. The decline was driven by nickel's underperformance in the base metals sector, with LME copper futures rising 1.03% to $14,362/mt and tin futures gaining 1.23%. Meanwhile, US stocks rose for a second straight session, with the S&P 500 posting its biggest one-day gain in a month (+1.06%) and the Dow up 1.18%, as Fed Governor Waller turned dovish and cooled expectations for a September rate hike.

Waller stated that recent data showed signs of slowing inflation, and if this trend continues over the next two weeks, he would lean towards keeping rates unchanged in the 3.50%-3.75% range. However, he also warned that if inflation data come in hot, a September hike remains possible.

The US-Iran conflict continued to keep oil prices firm, with Brent crude settling up 0.3% at $95.92/bbl and WTI rising 0.73% to $91.67/bbl. Citi maintained its Q4 Brent forecast of $70, arguing that supply will be in surplus after the Strait of Hormuz reopens.

On the spot market, SMM #1 refined nickel averaged 129,050 yuan/mt, down 650 yuan/mt from the previous trading day, while mainstream domestic brands of electrodeposited nickel were in the range of -200 to 500 yuan/mt. The most-traded SHFE nickel contract (2610) consolidated and pulled back in morning trading, closing the morning session at 127,940 yuan/mt, down 0.60%.