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SMM Morning Review – 2011/6/28 Nickel Market

iconJun 28, 2011 09:49
Source:SMM

SHANGHAI, Jun. 28 (SMM) -- LME nickel LME nickel for delivery in three months opened at USD 21,925/mt and closed at USD 22,298/mt, up by USD 135/mt from a day earlier, with the highest price at USD 22,298/mt and the lowest price at USD 21,825/mt. Daily trading volumes were 1,610 lots, up by 178 lots. Positions were 91,798 lots, down by 735 lots from a day earlier. LME nickel inventories were down by 318 mt to 109,554 mt.  

LME nickel prices were weighed down by stronger US dollar and largely moved below 5-day moving average overnight. However, boosted by neighboring market, LME nickel prices later advanced and closed at USD 22,298/mt, up by USD 135/mt from last Friday’s level.

Uncertainties over the Greece’s debt issue and China’s inflation control weighed on market sentiment. The Greek parliament began to discuss austerity plan from Monday, and international institutions providing help to Greece requested Greece to approval austerity plan this week in order to avoid debt default.  China’s premier Wen Jiabao stated in the UK on Sunday, inflation control was still the priority task at present. It may be difficult to control CPI below 4% but it is possible to control CPI below 5% through efforts.

Through joint efforts of the US and many other countries, crude oil prices tumbled. The International Energy Agency issued details of the strategic reserve release plan, which weighed on international crude oil prices. Meanwhile, many international investment banks also cut medium-to-long-term expectation on crude oil prices. As a leading commodity, crude oil’s price slump exerted significant psychological impact on investors.

Investors were cautious before outcome of Greek parliament’s vote on austerity plan.  Momentum of LME nickel prices was still weak. Although LME nickel prices closed higher overnight, trading volumes declined, indicating limited long powers. In this context, LME nickel prices lack strong upward momentum to rise significantly. At present, LME nickel prices meet resistance at USD 22,500/mt and find solid support at USD 21,800/mt. SMM predicts that spot nickel prices in Shanghai market will move in the RMB 163,000-165,500/mt on Tuesday.

 

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