SMM Morning Review – 2011/9/9 Nickel Market

SHANGHAI, Sept. 9 (SMM) -- LME nickel prices opened at USD 21,725/mt, and closed at USD 21,928/mt overnight, up USD 130/mt from a day earlier, with the highest price at USD 22,100/mt and the lowest price at USD 21,344/mt. Daily trading volumes were 2,982 lots, up 247 lots from a day earlier. Positions were 90,371 lots, up by 1,630 lots. LME nickel inventories were 99,180 mt, down 1,278 mt from a day earlier.

LME nickel prices fluctuated widely overnight. LME nickel prices slipped to a low of USD 21,344/mt during the European trading hours, but were boosted to reach a high of USD 22,100/mt from positive economic data from the US. Finally, LME nickel prices closed at USD 21,928/mt, up USD 130/mt from a day earlier, with resistance still felt at USD 22,000/mt.

On Thursday, risk appetite was boosted to certain extent from optimistic expectation of Obama’s job stimulus plan, but market sentiment deteriorated later as Jean-Claude Trichet hinted to increase liquidity and Ben Bernake delivered pessimistic statement over the US economic outlook. In addition, market sentiment was cautious before release of job stimulus plan. The euro was weighed down, while the US dollar advanced. The US equity markets closed with slight losses, while the European equity markets were firm. The gold rallied, paring previous losses. Crude oil slipped slightly, supported by decline of EIA inventory. LME base metal prices slipped to certain extent, but finally closed with gains across the board.  President Obama had announced to inject USD 447 billion mt for his jot stimulus plan, which will boost market sentiment. Market is waiting for China’s CPI for August to be released today.

LME nickel prices opened at USD 21,705/mt on Friday. It is expected that market sentiment will be cautious before release of economic data from China. SMM expects that LME nickel prices will continue to fluctuate, with current resistance at USD 22,000/mt on Friday. In the Shanghai nickel spot market, SMM expects that spot nickel prices will move in the RMB 163,000-164,000/mt range on Friday.