37% Chinese Investors Bearish toward Nickel Prices This Week, SMM Survey

SHANGHAI, Dec. 29 (SMM) – SMM surveyed 30 market players to find that 4 are bullish, 15 are neutral and 11 are bearish toward nickel prices this week.

The 13% optimistic ones see LME nickel rise to USD 8,600-8,700/mt. Major economic indicators from the US were mixed, with the US dollar index falling. European economy is recovering. China’s NPI producers are reluctant to sell, and nickel ore inventories fell due to the monsoon season in the Philippines. This should help nickel price rebound.

Some 50% see LME nickel fluctuate between USD 8,450-8,600/mt. Pressures from the US dollar index decreased as the US dollar index stabilized. Despite China’s NPI producers holding back goods, the Shanghai/LME nickel price ratio remains high, incentivizing inflows of imported zinc. LME nickel inventories also returned to a high level. When combined with pressure for stainless steel prices, LME zinc should hover in a wide range. SHFE 1605 nickel should move between RMB 68,000-69,000/mt.

About 37% are bearish, expecting LME nickel to fall to USD 8,300/mt. Profit at Chinese large industrials fell further in November. Stainless steel prices have fallen to an extremely low level, with severe overcapacity. Despite lower NPI supplies in China, there are still large inflows of imported nickel, adding to oversupply. SHFE 1605 nickel should fall to RMB 66,000-66,500/mt.