SMM Morning Review - 2011/12/16 Nickel Market

SHANGHAI, Jun. 16 (SMM) -- LME nickel LME nickel for delivery in three months opened at USD 17,550/mt and closed at USD 17,900/mt overnight, up by USD 430/mt from a day earlier, with the highest price at USD 18,049/mt and the lowest price at USD 17,331/mt. Daily trading volumes were 2,463 lots, down by 295 lots. Positions were 116,355 lots, up by 1,810 lots from a day earlier. LME nickel inventories were down by 276 mt to 89,544 mt.            

Market sentiment was boosted on better-than-expected PMI from China and the euro zone as well as upbeat manufacture dada and employment data from the US. Coupled with successful auction of Spanish government bond, market confidence recovered. Standard & Poor's cut credit ratings of 10 Spanish banks, with negative outlook. Afterwards, Fitch Ratings cut credit ratings of Barclays, Goldman Sachs and many other renowned banks, but did not cut credit rating of any euro zone countries, easing market concern over the euro zone to certain extent. In addition, the US dollar and the euro are both expected to experience technical adjustment.

During Thursday’s Asian trading hours, LME nickel prices fell to move below USD 17,400/mt. However, boosted by solid news during the European trading hours, LME nickel prices advanced to hit a high of USD 18,000/mt nd closed at USD 17,900/mt, up USD 430/mt from a day earlier. Upbeat unemployment data from the US and successful auction of Spanish government bond eased market sentiment to certain extent, driving LME nickel prices to move higher.

Market sentiment improved to certain extent, but the concern over the European debt crisis still haunted market. After a big slump, a technical correction is possible for LME nickel prices. It is expected that LME nickel prices will test USD 18,000/mt on Friday. In China’s nickel spot market, overnight LME nickel price rally will boost spot nickel prices, and spot nickel prices will move in the RMB 126,000-128,000/mt range on Friday.