SMM Morning Review – 2011/9/13 Nickel Market

SHANGHAI, Sept. 13 (SMM) -- LME nickel prices opened at USD 21,180/mt, and closed at USD 21,563/mt overnight, down USD 318/mt from a day earlier, with the highest price at USD 21,655/mt and the lowest price at USD 20,801/mt. Daily trading volumes were 2,352 lots, up 2 lots from a day earlier. Positions were 90,700 lots, down 283 lots. LME nickel inventories were 99,060 mt, down 120 mt from a day earlier.

LME nickel prices fluctuated overnight, as market was haunted by concern that the European debt crisis may deteriorate further. LME nickel prices fluctuated lower during the Asian trading hours and hit a low of USD 20,801/mt. During the European trading hours, LME nickel prices stabilized and surged, hitting a high of USD 21,655/mt. Finally, LME nickel prices closed at USD 21,563/mt, up USD 318/mt from a day earlier.

On Monday, risk aversion sentiment further grew due to rumor that Moody’s might cut credit rating of French banks. Investors concerned that the European debt crisis may deteriorate further, weighing down the euro. Later market sentiment was temporarily stabilized due to news that EU, European Central Bank and IMF will help Greece on Wednesday, with the US and EU equity market rebounding at the tail of the trading. Spot gold tumbled by 2.5% on Monday, as investors began to sell off gold after it reached historical high in order to make up losses from deteriorating European debt crisis. NYMEX crude oil for delivery in October closed with slight gains.

Based on current performance, LME nickel prices still meet resistance at USD 22,000/mt, and will move in the RMB 21,500-22,000/mt on Monday. In the Shanghai spot nickel market, overnight LME nickel price increase will boost spot nickel prices to certain extent. SMM expects that spot nickel price will move in the RMB 160,000-161,500/mt range on Monday.