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SMM Morning Review – 2011/12/6 Nickel Market
Dec 6,2011 10:03CST
smm insight
Overnight LME nickel price hike will boost spot nickel prices to move in the RMB 128,500-130,000/mt range on Tuesday.

SHANGHAI, Dec.6 (SMM) -- LME nickel prices opened at USD 17,750/mt and closed at USD 18,368/mt overnight, up USD 718/mt from a day earlier, with the highest price at USD 18,480/mt and the lowest price at USD 17,550/mt. Daily trading volumes were 4,099 lots, up 1,305 lots. Positions were 108,779 lots, up 4,056 lots. LME nickel inventories were 90,456 mt, down 366 mt from a day earlier.

Leaders from Franco and German planned to rewrite the EU constitution for more central control of euro zone budgets overnight, which boosted base metal prices move higher overnight. However, the Standard and Poor’s 15 euro zone nations, including Germany, France, the Netherlands, Austria, Finland, Italy, Luxembourg, on "credit watch negative" on Monday due to tightening credit conditions and possible rising of government bond. In response, stock and commodity markets pared intraday gains and LME base metal prices closed mixed with reduced risk appetite in the market. It is expected that market sentiment will be cautious before release of major central banks’ interest rate decision and China’s CPI data.

LME nickel prices slipped after a high open, but were boosted to hit USD 18,000/mt on weaker US dollar later. During the New York trading hours, LME nickel prices advanced further to hit USD 18,480/mt due to optimism brought by speech from Germany and French leaders. Finally, LME nickel prices closed at USD 18,368/mt, up USD 718/mt from a day earlier.

Nickel fundamentals have not changed significantly, and nickel market outlook remains gloomy. The significant rally of LME nickel prices is mainly a technical rebound, and the nickel market still maintains weak momentum. SMM expected that upward momentum of nickel will wane to certain extent, and LME nickel prices will fluctuate on Tuesday, with resistance felt at USD 18,500/mt. In China’s domestic nickel spot market, overnight LME nickel price hike will boost spot nickel prices to move in the RMB 128,500-130,000/mt range on Tuesday.

nickel; nickel price; LME nickel price; spot nickel price; European debt crisis; US dollar; euro; Dec. 6; in the Shanghai nickel spot market;

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