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SMM Morning Review - 2011/12/9 Nickel Market
Dec 9,2011 10:22CST
smm insight
Source:SMM
Boosted by overnight LME nickel price increase, spot nickel prices are expected to move in the RMB 129,500-130,500/mt range on Friday.

SHANGHAI, Dec. 9 (SMM) -- LME nickel LME nickel for delivery in three months opened at USD 18,100/mt and closed at USD 18,240/mt overnight, up by USD 240/mt from a day earlier, with the highest price at USD 18,534mt and the lowest price at USD 17,965/mt. Daily trading volumes were 3,129 lots, up by 1,114 lots. Positions were 111,333 lots, up by 851 lots from a day earlier. LME nickel inventories were down by 162 mt to 90,348 mt.

The European Central Bank (ECB) announced to cut December interest rate by 25 basis points from 12.5% to 1.00%, boosting the US dollar.  Later the ECB chief Mario Draghi said economic outlook in the euro zone was not clear, further dampening market sentiment. In response, the European and US stock markets slumped, and LME base metal prices tumbled as well. China will announce a slew of economic data for November. Market widely expects that inflation index will fall significantly.

LME nickel prices rallied all the way to hit USD 18,534/mt during the Asian and early European trading hours, but immediately fell following interest rate cut by EBC. Coupled with depressing remark from the ECB chief, LME nickel prices fell below USD 18,000/mt. Finally, LME nickel prices advanced slightly at the tail of the trading and closed at USD 18,240/mt, up USD 240/tm from a day earlier.

It is expected that market sentiment will remain cautious before outcome of China’s CPI data and the US summit, and SMM expects that LME nickel prices will be supported at USD 18,000/mt on Friday. Boosted by overnight LME nickel price increase, spot nickel prices are expected to move in the RMB 129,500-130,500/mt range on Friday.

 

nickel; nickel price; LME nickel price; spot nickel price; European debt crisis; US dollar; euro; Dec. 9; in the Shanghai nickel spot market;

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