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LME base metals largely closed with gains on Thursday, due to a weaker US dollar and from traders' expectation that demand for industrial commodities will grow during the post earthquake and tsunami period. The US dollar index slipped significantly to end below 76.
Market focus is shifted to growing demand from rebuilding after Japan's disaster. In addition, dip-buying also lent support for base metals. Economic data announced by the US was optimistic, and the decline in jobless claim and the highest level of Philadelphia Fed business activity index since January 1984 boosted market sentiment. The People's Bank of China indicated that it will not hike interest rate and bank requirement reserve ratio soon, thus further inspiring market sentiment.
Although Japan's nuclear power plant is still the biggest concern for investors, market focus is gradually shifting. The continuous improvement of the US economy as well as growing demand for metal after Japan's earthquake will be positive factors attracting investors back into market. SMM predicts that LME nickel prices will meet resistance at USD 27,000/mt, and receive support at USD 25,500/mt on March 18.
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