SHANGHAI, Mar. 31 (SMM) -- LME nickel contract for delivery in three months opened at USD 26,501/mt and closed at USD 26,070/mt over night, down by USD 530/mt from a day earlier, with the highest price at USD 26,625/mt and the lowest price at USD 25,901/mt. Daily trading volumes were 1,956 lots and positions were 106,336 lots. LME nickel inventories were down by 348 mt to 124,158 mt.                 

LME base metal prices closed with losses on Wednesday, as the economic data from the US was lower than expected, and a lack of buying interest from China dampened market. LME nickel prices closed below all moving averages again on March 31, and are heavily weighed and move weakly at present. Losses in LME nickel prices are largely made during the European trading hours, with prices slipping to the lowest at USD 26,000/mt, but finally closed above USD 26,000/mt due to strong support at this level.

Waning demand from China and possible slower recovery of global economy fueled wait-and-see sentiment in the market. China's tight monetary policy, the Middle East turmoil, oil price hike, European's debt crisis and Japan's nuclear crisis all weighed on global economic recovery and raised concern over raw material demand.

The US Employment consulting Services released a report on Wednesday that the number of planned job cuts at enterprises in March lowered, despite contractions at public sectors. The number of planned job cuts at enterprises in March was down by 18% to 41,528 from a month earlier, and the number was 50,702 in February. The figure in March was sharply down by 39% from 67,611 in March 2010.

Market focus is shifting to China's manufacturing data to be released on Friday. Concern over possible interest rate in China, Japan's nuclear crisis and the Libya unrest continue to weigh on base metal prices.  SMM believes that LME nickel prices will remain volatile on March 31, with current resistance at USD 26,700/mt, and support at USD 26,000/mt on March 31. Prices in the Shanghai nickel spot market are expected to slip further due to soft demand and declines in overnight LME nickel prices.

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