Metals News
SMM Morning Review - 2011/3/29 Nickel Market
smm insight
Mar 29,2011

SHANGHIA, Mar. 29(SMM) -- LME nickel futures for delivery in three months opened at USD 27,050/mt and closed at USD 26,203/mt, down by USD 871/mt from a day earlier, with the highest price at USD 27,050/mt and the lowest price at USD 26,175/mt. Daily trading volumes were 1,903 lots and positions were 106,448 lots. LME nickel inventories were down by 168 mt to 124,086 mt.

LME base metal prices largely ened with losses over night, as market sentiment was dampened due to investors' concern that China's weakening demand and buying as well as growing inventories will curb investment demand. LME nickel prices slipped along with LME copper prices, with prices down by 3.2% from a day earlier. LME nickel prices slipped below 5-day and 20-day moving average consecutively after falling through 60-day moving average, and closed below all moving averages. Overall price performance was weak, and LME nickel prices are expected to slip further.

The second round of quantitative easing monetary policy from the US will last until June, and the US Federal Reserves indicated possible interest rate hike. Whether or not China's tight monetary policy will loose to certain extent in April has become market focus, and expectation of tight monetary policy will weigh on base metal market.

German Chancellor Angela Merkel failed to win a local election on March 27, which weighed on the euro as market concerned over political and economic uncertainties in the European market. Concern over Japan's nuclear crisis renewed again, as radiation level at nuclear plant at fukushima is over limit.

Global monetary policy has become market focus at present. Impact from other factors, including Japan's nuclear crisis, the Libya unrest and the European debt crisis, continue to weigh on base metal prices. SMM expects that LME tin prices will move weakly on March 29, SMM expects that LME nickel prices will receive support at USD 25,700/mt on March 29.


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