Core Viewpoint - Nickel prices are experiencing a downward trend due to weak supply and demand dynamics, macroeconomic expectations shifting, and pre-holiday demand contraction [2][11] Market Analysis - Price Movement: The main nickel futures contract on the Shanghai Futures Exchange showed a weak performance this week, opening at 138,000 CNY/ton and closing at 131,840 CNY/ton, marking a weekly decline of approximately 5.83%. The highest price during the week was 141,100 CNY/ton, while the lowest was 129,300 CNY/ton, with a volatility exceeding 8.4% [2][11] - Trading Volume: Trading volume initially increased but then decreased, with open interest dropping from 110,900 contracts at the beginning of the week to 85,500 contracts by Friday, indicating continued capital withdrawal [2][11] - Spot Market: The average price of SMM1 electrolytic nickel was 139,300 CNY/ton, down 10,350 CNY/ton from the previous week. The average premium for Jinchuan nickel was 9,500 CNY/ton, up 2,200 CNY/ton from last week [2][11] Supply and Demand - Supply Side: Domestic refined nickel production increased month-on-month, with LME and SHFE inventories remaining high. The recovery of Indonesian nickel pig iron production exceeded expectations, raising concerns about oversupply [3][12] - Demand Side: Pre-holiday inventory accumulation is concluding, and both the stainless steel and new energy battery sectors are entering a seasonal lull, leading to stagnant downstream purchasing activities and weak spot market transactions [3][12] Cost and Profit - Production Costs: The cost of producing electrolytic nickel via integrated MHP is 114,117 CNY/ton with a profit margin of 25.00%. The cost for high-grade nickel is 127,279 CNY/ton with a profit margin of 12.10%. External sourcing of nickel sulfate results in a cost of 153,328 CNY/ton with a loss margin of 14.60% [4][12] - Inventory Levels: SHFE nickel inventory increased to 57,457 tons from 55,396 tons the previous week. LME nickel inventory decreased slightly to 285,282 tons from 286,284 tons. The total refined nickel inventory in China, including bonded zones, rose to 70,429 tons from 69,238 tons [4][12] Strategy - Given the current price volatility and the approaching Spring Festival holiday, a range-bound trading strategy is recommended. However, ongoing supply disruptions in nickel ore may provide some cost support, suggesting that buying on dips could be considered if prices decline significantly [5][13]

Core Viewpoint - Recent statements from Federal Reserve officials have been inconsistent, leading to uncertainty in the market regarding potential interest rate cuts in December [1] Group 1: Economic Resilience and Caution - Minneapolis Fed President Kashkari noted that the current economic performance is stronger than expected, with most businesses showing confidence despite some credit tightening for low-income groups [3] - San Francisco Fed President Daly expressed that it is too early to draw conclusions about the December meeting, indicating that current policy is in a "neutral" state and further data is needed [3] Group 2: Increasing Support for Maintaining Rates - Cleveland Fed President Mester stated that current interest rates have limited restrictive effects and should be maintained to continue cooling inflation, which may persist into early next year [4] - Boston Fed President Collins also advocated for keeping rates at current levels for some time, warning that strong economic growth could slow down inflation's decline [4] - Even traditionally dovish officials, such as Chicago Fed President Goolsbee, have shifted their stance recently [4] Group 3: Market Expectations Shift - Investor expectations for a rate cut in December have dropped to around 47%, a significant decrease from the near 100% expectation prior to the October meeting, indicating a reassessment of the Fed's policy direction [5] Group 4: Anticipated Divergence in December Meeting - Observers expect that regardless of the decision made in December, Fed Chair Powell may face more dissenting votes than usual, with two members already opposing the last meeting's decisions [6] - St. Louis Fed President Bullard emphasized the need for "reverse suppression" of inflation, while Fed Vice Chair Jefferson advocated for caution in the absence of sufficient data [6]