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SMM Morning Review – 2011/7/4 Nickel Market
Jul 4,2011 09:42CST
smm insight
Source:SMM

SHANGHAI, Jun. 4 (SMM) -- LME nickel LME nickel for delivery in three months opened at USD 23,300/mt and closed at USD 23,189/mt last Friday, down by USD 291/mt from a day earlier, with the highest price at USD 23,455/mt and the lowest price at USD 23,001/mt. Daily trading volumes were 1,961 lots, down by 875 lots. Positions were 89,958 lots, down by 349 lots from a day earlier. LME nickel inventories were down by 312 mt to 106,836 mt.          

The mixed economic data released last Friday made base metal prices volatile. LME nickel prices were volatile last Friday. Affected by lower-than-expected PMI from China during the Asian trading hours, LME nickel prices were weighed down, and later remained fluctuation trend. During the evening trading hours, LME accelerated declines and finally closed at USD 23,189/mt.

China’s official PMI for June was lower than expectation, weighing on base metal prices, with June’s PMI falling from 52.0 in May to current 50.9, down by 1.1 percentage points and the lowest in 28 months. China’s official PMI only rebounded briefly in March, suggesting lowering trend of economic growth.

However, better-than-expected manufacturing data lent upward momentum to base metal prices later. The US manufacturing data for June from ISM was 55.3, far higher than previous estimation of 51.8 and May’s 53.5, rallying for 23 consecutive months.

The eased Greek debt crisis and bullish performance of US equity market will lend support for base metal prices. It is expected that LME nickel prices will remain volatile, with current support at USD 23,000/mt and resistance at USD 23,500/mt. Jinchuan Group’s ex-works nickel price at RMB 168,000/mt will support nickel spot prices to certain extent. SMM expects that Shanghai nickel spot prices will slip to certain extent, and will largely move in the RMB 167,000-168,500/mt range on Monday.

 

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