SHANGHAI, Mar. 21 (SMM) -- LME nickel for delivery in three months opened at USD 25,850/mt and closed at USD 26,700/mt overnight, up by USD 775/mt from a day earlier, with the highest price at USD 26,800/mt and the lowest price at USD 25,800/mt. Daily trading volumes were 2,977 lots and positions were 105,442 lots.LME nickel inventories were down by 498 mt to 125,100 mt.
Supported by stronger euro, LME base metals largely ended with gains last Friday, but concern over possible waning demand from China weighed on prices to certain extent. LME nickel prices advanced and closed 3.3% higher from a day earlier due to short covering, paring early losses, and the highest price hit 60-day moving average.
The People's Bank of China announced last Friday to raise bank requirement reserve ratio, the third of its kind in 2011 and the ninth of its kind since early 2010. LME copper prices took the lead to slip in response to this news.
The news that Libya was committed to conforming with United Nations resolutions and ceasing fire further boosted market confidence.
Earlier, G7 united together to intervene exchange market in order to curb soaring Japanese yen and to ease market unrest caused by Japan's nuclear crisis.
Market should focus on the US existing home sales data to be released on March 21. Based on price performance, panic sentiment caused by Japan's nuclear crisis has eased to certain extent, but uncertainties from China's tightening policy, the Middle East unrest and Japan's nuclear crisis still haunted market. The continuous improvement of the US economy as well as a growing demand for metal after Japan's earthquake will be positive factors to attract investors back into market. SMM predicts that LME nickel prices will meet resistance at USD 27,000/mt, and receive support at USD 25,700/mt on March 21.
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