SMM Daily Review - 2011/9/5 Nickel Market

SHANGHAI, Sept. 6 (SMM) -- Last Friday, LME nickel prices opened at USD 21,700/mt and closed at USD 21,460/mt, down by USD 315/mt from a day earlier, with the highest price at USD 21,807mt and the lowest price at USD 21,225/mt. On Monday, LME nickel prices advanced slightly to USD 21,600/mt after opening at USD 21,500/mt. Later, LME nickel prices were weighed down to hit a low of USD 21,120/mt due to stronger US dollar. Last Friday’s weaker-than-expected non-farm employment data from the US depressed market sentiment. LME nickel inventories were 102,408 mt, down 882 mt from a day earlier.

In the Shanghai nickel spot market, steady decline of LME nickel prices negatively affected transactions in spot market. Transactions were quiet and traded prices slipped all the way in the Shanghai nickel spot market. Mainstream traded prices of nickel from Russia were in the RMB 161,000-161,300/mt range, and mainstream traded prices of nickel from Jinchuan Group were in the RMB 161,200-161,500/mt range. Transactions were largely made among traders in the morning trading hours, with few downstream consumers entering market.

Based on result of an SMM survey, 60% market players believe that nickel prices will be neutral and will fluctuate around USD 21,500/mt in the following week. 25% market players expect that nickel prices will continue to fall. The remaining 15% market players hold that nickel prices will bottom out in the short term, but any rebound will be limited. Although market views are mixed, it is widely believed that nickel prices will not fluctuate widely, with growth and losses both limited.