SHANGHAI, Feb. 24 (SMM) -- LME nickel prices opened at USD 28,450/mt and closed at USD 28,500/mt, up by USD 50/mt from a day earlier, with the highest price at USD 28,713/mt and the lowest price at USD 27,998/mt. Daily trading volumes were 3,139 lots and positions were 101,058 lots. LME nickel inventories were down by 522 mt to 129,198 mt.
Commodity prices were still weighed by the Middle East unrest. Coupled with tightening concern from China, performance of base metal prices was still sluggish on February 23rd. LME nickel prices slipped and fell below 20-day moving average after slight rally in early trading, but prices began to fluctuate weakly after rebounding to USD 31,500/mt and finally closed above flat level.
Exacerbated turbulence in Libya and significant oil price hike may negatively affect global economy recovery, casting a show on base metal outlook. Due to concern that oil prices may be pushed higher from supply cut in Libya, the US crude oil futures CLc1 surged to USD 100/bbl. Investors concerned that rally in energy prices may lead to high inflation, forcing China and other major base metal consuming countries to hike interest rate. The US equity market fell for the second consecutive days, as investors sold commodities with higher risk and brought government bonds, gold and Swiss Franc to hedge against risks. Market concerned that unrest in Libya may spread to North Africa and other courtiers on Middle East.
Economic data on durable orders and new home sales will be released on Thursday. Base metal prices will continue to be weighed due to tension in the Middle East. SMM expects that LME nickel prices will receive support at USD 28,000/mt on February 24th.
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