SMM Morning Review - 2011/7/25 Nickel Market

SHANGHAI, Jul. 25 (SMM) -- LME nickel LME nickel for delivery in three months opened at USD 23,900/mt and closed at USD 23,950/mt overnight, up by USD 50/mt from a day earlier, with the highest price at USD 24,201/mt and the lowest price at USD 23,850/mt. Daily trading volumes were 1,029 lots, down by 956 lots. Positions were 86,753 lots, up by 1,029 lots from a day earlier. LME nickel inventories were down by 156 mt to 101,418 mt.

Supported by weaker US dollar, LME nickel prices fluctuated higher during the Asian trading hours and the early European trading hours, but later fell to hit a low of USD 23,850/mt along with weaker euro. Although LME nickel prices rebounded at the tail of the trading, prices only closed up by USD 50/mt finally.  LME nickel prices still fluctuate around USD 24,000/mt and shall continue to hover at this level.

Last Friday, the EU and US equity markets largely closed with gains and commodity prices rebounded due to warmed market sentiment following consensus of the Greek bailout plan, but no significant progress was reported to the US debt ceiling negotiation.

The euro fell at the tail of the trading, and the US dollar index closed with slight gains. Gold closed with gains and finally finished above USD 1,600/ournce from risk aversion buying.

May’s industrial orders announced on July 22nd from the euro zone were the highest since August 2010, significantly supporting base metal prices. Weak fundamentals in China and the US as well as shooting spree in Norway resulted in nervous sentiment in financial market, weighing on base metal market. LME nickel prices still meet resistance at USD 24,000/mt, and the lingering EU debt crisis will continue to weigh on longs sentiment. SMM expects LME nickel prices will fluctuate around USD 24,000/mt on Monday. SMM expects that Shanghai nickel spot prices will remain stable between RMB 174,500-175,000/mt on Monday.