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SMM Morning Review - 2011/8/8 Nickel Market
Aug 8,2011 10:10CST
price review forecast
Source:SMM
Shanghai nickel spot prices are expected to fall further to between RMB 170,000-171, 000/mt, and may even fall below RMB 170,000/mt on Monday.

SHANGHAI, Aug. 8 (SMM) -- LME nickel LME nickel for delivery in three months opened at USD 23,420/mt and closed at USD 22,700/mt overnight, down by USD 905/mt from a day earlier, with the highest price at USD 23,420/mt and the lowest price at USD 22,350/mt.  Daily trading volumes were 6,033 lots, up by 2,456 lots. Positions were 91,283 lots, up by 668 lots from a day earlier. LME nickel inventories were down by 126 mt to 102,654 mt.

LME nickel prices were largely stable last Friday, but experienced severe sell-offs at the tail of the trading and hit a low of USD 22,350/mt, with price finally closing at USD 22,700/mt, down by 3.83% from day earlier. Last Friday’s better-than-expected non-farm employment data from the US supported base metal prices earlier, but market concern over the European debt crisis and future economic growth weighed down on market, which sent down the Dow Jones index to the yearly lowest level and triggered large-scale sell-offs in base metal market.

The US Department of Commerce announced last Friday that July's non-farm employment data increased by 117,000, while previous estimation was up by 85,000. Revised non-farm employment for June was up by 46,000, while the previous reading was an increase by 18,000. The US unemployment data for July was 9.1%, while the previous estimation was 9.2%. Unemployment data in June was 9.2%. July’s private payrolls increased by 154,000, higher than previous estimation of an increase by 115,000.  Growth in June’s private payrolls revised from previous 57,000 to 80,000.

The Standard and Poor’s announced last Friday to cut the US AAA long-term sovereign credit rating to AA+, and put the US credit rating outlook on negative watch. This is the first time that the US loses its AAA sovereign credit rating.

LME nickel prices slumped by USD 600/mt to USD 22,000/mt after opening on Monday. SMM expects stock market and commodity market will be both weighed down today, and LME nickel prices will find support at USD 21,300/mt. Shanghai nickel spot prices are expected to fall further to between RMB 170,000-171, 000/mt, and may even fall below RMB 170,000/mt on Monday. Close attention should be paid whether or not Jinchuan Group will cut ex-works nickel prices today. 
 
 

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