Metals News
SMM Morning Review - 2011/3/17 Nickel Market
smm insight
Mar 17,2011

SHANGHAI, Mar. 17 (SMM) -- LME nickel for delivery in three months at USD 25,000/mt and closed at USD 24,870/mt overnight, up by USD 5/mt from a day earlier, with the highest price at USD 25,480/mt and the lowest price at USD 24,800/mt. Daily trading volumes were 3,199 lots and positions were 107,409 lots. LME nickel inventories were down by 1,104 mt to 126,570 mt.                 

LME base metals mostly ended with gains on Wednesday. Equity market advanced early Wednesday due to dip-buying support, and base metal prices also rallied slightly. LME nickel prices rebounded slightly after open, but decline in global equity market in afternoon European trading hours pared early gains of LME nickel prices.

The Middle East unrest added uncertainties and boosted oil price, which fueled expectation of inflation. Coupled with strong earth quake in Japan, decline risk for metal prices is increasing in the short term. In addition, economy recovery is also facing other obstacles, including the largest decline in 27 years in the US February's new home start, and Moody's cutting of Portugal sovereign credit rating by two grades. In addition, the stabilized trend of the US dollar also weighs on base metals.

The US will announce industrial output data on March 17. Market still focuses on Japan's radiation leak and the Middle East tension. LME nickel prices have slipped for seven consecutive days and a technical rebound is likely in the short term, but overall pessimistic sentiment may hard to reserve in the short term. SMM predicts that LME nickel prices will meet resistance at USD 26,000/mt, and receive support at USD 24,500/mt on March 17.


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