SHANGHAI, Sept. 2 (SMM) -- LME nickel prices opened at USD 22,208/mt, and closed at USD 21,775/mt overnight, down by USD 515/mt from a day earlier, with the highest price at USD 22,280/mt and the lowest price at USD 21,672/mt. Daily trading volumes were 2,046 lots, down by 305 lots from a day earlier. Positions were 85,624 lots, up by 358 lots. LME nickel inventories were 104, 502 mt, up by 702 mt from a day earlier.

LME nickel prices fluctuated lower during the Asian trading hours and accelerated declines during the early European trading hours, as the euro weakened following announcement of weaker-than-expected manufacturing data from the Europe. LME base metal prices, including LME nickel prices, were weighed down. LME nickel prices fell to hit a low of USD 21,672/mt, and closed at USD 21,775/mt, down by USD 515/mt from a day earlier but founding certain support at 5-day moving average. 

On Thursday, August’ PMI from Italy, France and Germany remained weak, while August’s ISM PMI from the US was far better than expectation, boosting the US equity market. The US dollar rallied, while the euro slipped, with mixed performance in the European equity market. Gold and crude oil largely closed flat, while LME base metal prices were largely dragged down by manufacturing data, with LME zinc and LME nickel tumbling by more than 2%. The US dollar continued to rebound, and market concern over base metal demand intensified following announcement of China’s reduced imports of copper, weighing on base metal prices. In addition, market sentiment was relatively cautious before release of August's non-farm payroll number from the US. 

LME nickel prices opened at USD 21,700/mt on Friday. As manufacturing data announced on Thursday were not positive, LME nickel prices are expected to be further weighed today. Coupled with cautious sentiment before the release of non-farm employment payroll number from the US, SMM expects that LME nickel prices will continue to fluctuate on Friday. In the Shanghai nickel spot market, overnight's LME nickel price slump will depress spot transactions, and SMM expects that spot nickel prices will move in the RMB 163,000-164,000/mt range on Friday.