SHANGHAI, Mar. 8 (SMM) -- LME nickel contract for delivery in three months opened at USD 28,700/mt and closed at USD 27,450/mt, down by USD 1,300/mt from a day earlier, with the highest price at USD 29,020/mt and the lowest price at USD 27,300/mt. Daily trading volumes were 3,433 lots and positions were 108,869 lots. LME nickel inventories were down by 474 mt to 129,384 mt.
The Libya tension led to surge of international oil price, and long positions of global crude oil contract increased significantly. Crude oil futures contract price hit a 2-year high, fueling expectation of inflation. Chinese government strives to control inflation rate in 2011 at around 4%, igniting concern that the largest metal consumer will further tighten its monetary policy. In this context, concerns over waning demand made investors sell off base metals.
Increase in energy price will slow economic recovery pace. LME nickel prices meet resistance at USD 28,000/mt and receive support at USD 27,000/mt on March 8.
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