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SMM Morning Review – 2011/9/21 Nickel Market
Sep 21,2011 10:00CST
price review forecast
SMM expects that spot nickel prices will move in the RMB 155,500-157,000/mt range on Wednesday.

SHANGHAI, Sept. 21 (SMM) -- LME nickel prices opened at USD 21,100/mt and closed at USD 21,066/mt overnight, up USD 60/mt from a day earlier, with the highest price at USD 21,445/mt and the lowest price at USD 20,905/mt. Daily trading volumes were 2,333 lots, down 300 lots. Positions ere 86,112 lot, down 2,025 lots. Inventories were 98,046 mt, up 36mt.

LME nickel prices were volatile overnight. LME nickel prices once advanced to hit USD 21,445/mtu due to progress in European debt discussion and expectation of stimulus policy from Fed meeting. However, market concern over economic growth still weighed on base metal market. IMF cut global economic growth expectation, dampening market sentiment and dragging down LME nickel prices from high. Finally, LME nickel prices closed at USD 21,066/mt, up USD 60/mt. LME nickel was among few base metal products that closed with gains overnight.

On Tuesday, market sentiment was still weighed by weak economic data from the euro zone and the US, Italian’s credit cut and IMF’s downgrade adjustment of global economic growth expectation. On the other hand, IMF said the EU will definitely provide capital support once Greece conducted self-salvation, easing market sentiment to certain extent. The US dollar was weighed, while the euro rebounded significantly. The US equity market was weak, while the European equity market rallied. The gold returned to USD 1,800/ounce again, and the crude oil surged to close nearly at USD 87/barrel. LME base metal prices largely closed with losses. 

Market focus has shifted to the Federal Reserve’s monetary policy meeting, and market sentiment remained stable at present. China will announce September HSBC PMI, which will affect market movement to certain extent. Based on current LME nickel price movement, LME nickel prices received relatively strong support at USD 21,000/mt. SMM expects that market sentiment will be cautious and LME nickel prices will fluctuate narrowly before release of Fed monetary policy meeting result, with solid support at USD 21,000/mt. In domestic nickel spot market, overnight’s LME nickel price advance will limitedly boost spot nickel prices, and SMM expects that spot nickel prices will move in the RMB 155,500-157,000/mt range on Wednesday.

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