SHANGHAI, Oct. 24 (SMM) -- The post-holiday surge in base metal markets has ended, so market sentiment will be cautious before outcome of Sunday’s EU summit is known. Base metal prices are expected to continue fluctuating at low levels, but with support at USD 18,000/mt. However, if support is no longer solid at RMB 18,000/mt, the next support level will be USD 16,800-17,000/mt.
In China’s domestic markets, Jinchuan Group’s ex-works price remain firm at RMB 139,000/mt, but failed to support spot nickel prices as LME nickel prices fell. Demand for nickel remains sluggish and most private steel mills are affected by tight liquidity, reducing demand for raw materials. In addition, environmental inspections and RMB appreciation are affecting exports from the electroplating sector, which is also reducing demand for refined nickel. Without strong demand, spot nickel prices lack upward momentum, and SMM expects spot nickel prices will continue to move at low levels in the coming week. If LME nickel prices fall further, the low-end for spot nickel prices will be RMB 130,000/mt. If the EU summit produces positive news, LME nickel prices and spot nickel prices will likely rebound next week.