SMM Morning Review – 2011/9/16 Nickel Market

SHANGHAI, Sept. 16 (SMM) -- LME nickel prices largely moved stably between USD 21,299/mt and USD 21,399/mt during the early trading hours. However, prices began to rally during the European trading hours and hit a high of USD 21,837/mt. Finally, LME nickel prices closed at USD 21,815/mt, up USD 516/mt or up 2.42% from a day earlier. LME nickel inventories were 98,220 mt, down 486 mt from a day earlier.

LME base metals closed with gains across the board overnight, which was due to positive economic data from the euro zone during the European trading hours and also owing to move that ECB decided to provide U.S. dollar liquidity to euro-area banks. Investors were encouraged by this move and shrugged off a bunch of U.S. weak data including more-than-expected weekly initial jobless claims, a manufacturing contraction in the New York region and the significant growth slowdown of overall industrial production in August.

The US dollar has been slipped for four consecutive days, and will not likely fall sharply on Friday. SMM expects that the US dollar will struggle around 76.3, and LME nickel prices will be weighed below USD 22,000/mt on Friday. In the Shanghai nickel spot market, traded prices will between RMB 158,500-160,000/mt on Friday. Close attention should be paid whether or not Jinchuan Group will adjust its ex-works nickel prices.