SMM Daily Review - 2011/9/26 Nickel Market

SHANGHAI, Sept. 27 (SMM) -- Last Friday, LME nickel prices opened at USD 18,100/mt and closed at USD 18,150/mt, up USD 1,200/mt from a day earlier, with the highest price at USD 19,050 mt and the lowest price at USD 16,800. On Monday, LME nickel prices fell to hit a low of USD 17,150/mt after opening at USD 18,400/mt during the Asian trading hours, but later pared certain losses from weaker US dollar. Panic sentiment still lingered in the market, and LME nickel prices were still weighed. LME nickel inventories were 97,140 mt, down 102 mt.

In the Shanghai nickel spot market, Jinchuan Group cut ex-works nickel prices by RMB 14,000/mt to RMB 139,000/mt on Monday, dragging down spot nickel prices below RMB 140,000/mt. During the morning trading hours, mainstream traded prices of Russian nickel were around RMB 138,000/mt and mainstream traded prices of Jinchuan nickel were around RMB 140,000/mt. During the afternoon trading hours, transactions of spot nickel were quiet along with LME nickel price tumble, with offers in the RMB 135,000-136,000/mt range. Trading sentiment was extremely quiet owing to the lack of expected pre-holiday stock replenishment.

Based on result of an SMM survey, market players believe that nickel prices will continue to fall this week. Risk aversion sentiment is strong and many investors have exited market, as Greek debt will mature in October. Traders, especially traders from China, are not optimistic towards price trend during the National Day holiday and believe that prices will fall further from experience accumulated in the previous years. Negative news floods in the market and panic sentiment is still strong, so players are pessimistic towards nickel price trend in this week and believe that LME nickel prices will fall to around USD 17,000/mt.