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SMM Morning Review - 2011/8/2 Nickel Market
Aug 2,2011 09:53CST
smm insight
Source:SMM
In the Shanghai nickel spot market, prices will move in the RMB 179,500-180,500/mt range due to support from Jinchuan Group’s ex-works nickel price at RMB 181,000/mt.

SHANGHAI, Aug. 2 (SMM) -- LME nickel for delivery in three months opened at USD 24,901/mt and closed at USD 24,635/mt overnight, down by USD 258/mt from a day earlier, with the highest price at USD 25,195/mt and the lowest price at USD 24,451/mt. Daily trading volumes were 3,830 lots, up by 910 lots. Positions were 90,186 lots, up by 900 lots from a day earlier. LME nickel inventories were up by 558 mt to 103,098 mt.

LME nickel prices advanced all the way to hit a high of USD 25,195/mt during the Asian trading hours on Monday, as the two parties finally reached a consensus on raising US debt limit. During the evening trading hours, lower-than-expected manufacturing data from the US intensified market concern. Combined with stronger US dollar, LME nickel prices fell to hit a low of USD 24,451/mt, with prices finally closing at USD 24,635/mt, down by USD 258/mt.

The two political parties finally reached on consensus on raising the US debt limit and avoided a debt default before the deadline. In this context, market sentiment eased to certain extent, but stronger US dollar weighed on base metal prices.

July’s PMI released on Monday indicated slower-than-expected growth in manufacturing activities in Asia and the Europe, and July’s PMI from the US also suggested slower-than-expected growth in manufacturing activities. According to data from ISM, July’s PMI from the US was 50.9, the lowest since July 2009. Market previous expectation was 54.9, and the previous reading was 55.3 in June.

Eased US debt concern will send the US dollar higher, which will weigh on base metal prices to certain extent. SMM expects LME nickel prices face risks to fall on Tuesday. In the Shanghai nickel spot market, prices will move in the RMB 179,500-180,500/mt range due to support from Jinchuan Group’s ex-works nickel price at RMB 181,000/mt. 
 

 

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