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SMM Morning Review – 2011/9/23 Nickel Market
Sep 23,2011 10:01CST
price review forecast
Spot nickel prices will move in the RMB 148,000-150,000/mt range on Friday.

SHANGHAI, Sept. 23 (SMM) -- LME nickel prices opened at USD 20,300/mt and closed at USD 17,000/mt overnight, down USD 3,598/mt from a day earlier, with the highest price at USD 20,450/mt and the lowest price at USD 17,000/mt. Daily trading volumes were 8,068 lots, up 4,080 lots. Positions ere 84,859 lots, up 867 lots. Inventories were 97,818 mt, up 180 mt.

LME nickel prices experienced the sharpest decline among other base metals overnight, with LME nickel prices closing USD 3,598/mt lower, or down 17.47% from a day earlier, the lowest since February 2010. PMI announced from China and Europe both disappointed market, triggering intensified concern that global economy may fall further. In addition, Federal Reserve meeting result also suggested weak momentum for the US economy growth, triggering panic sell-offs overnight.

On Thursday, September’s PMI announced from China and euro zone slipped, and Germany’s PMI was below 50 mark. In addition, factory orders for July contracted sharply in the euro zone, and initial consumer confidence index for September also fell sharply. IMF restarted emergency relief. Sluggish economic data fueled market concern that global economy may slip into another recession, triggering slumps in global financial market. The US dollar further advanced from risk aversion sentiment, and the euro plummeted. Equity markets in Europe and the US fell sharply, with Dow Jones Industrial Average falling below 11,000 mark, down 3.51%. Gold and crude oil also tumbled. LME base metals plunged, with LME tin and LME nickel both down by more than 10%.

No stimulus policy was released at Federal Reserve meeting. In addition, credit raging agencies further weighed on euro zone due to unsolved debt issue in the euro zone. Moreover, China’s CPI was at high level and capital was tight at enterprises, and HSBC’s China PMI has been blow 50 for three consecutive months. Meanwhile, various countries lack substantially supportive policy for economic growth, and market sentiment towards global economic outlook was pessimistic.

LME nickel prices opened at USD 18,100/mt on Friday. A technical rebound is possible for LME nickel price after declining excessively overnight. It is expected that LME nickel prices will largely move around USD 18,500/mt on Friday, and may fall further in the future. In domestic nickel spot market, spot prices will fall sharply along with overnight LME nickel price plummet, and spot nickel prices will move in the RMB 148,000-150,000/mt range on Friday.

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