SMM Morning Review - 2011/12/19 Nickel Market

SHANGHAI, Jun. 19 (SMM) -- LME nickel LME nickel for delivery in three months opened at USD 17,875/mt and closed at USD 18,625/mt, up by USD 610/mt from a day earlier, with the highest price at USD 18,625/mt and the lowest price at USD 17,830/mt. Daily trading volumes were 3,019 lots, up by 556 lots. Positions were 118,271 lots, up by 1,916 lots from a day earlier.  LME nickel inventories were down by 834 mt to 88,710 mt. 

Last Friday’s US consumer price index showed easing inflation pressure in the country, fueling expectation that the Federal Reserve may adopt further ease monetary policy to stimulate the US economy. In this context, the US dollar fell slightly. Italy's government won a confidence vote on austerity measures in the lower house, while Germany parliament's upper house passed 2012 budget. Meanwhile, expectation over December long-term inflation in the UK fell to 3.4%. These upbeat news from Europe boosted risk appetite in the market. Although Fitch put credit ratings of Belgium, Spain, Italy, Ireland, Slovenia and Cyprus into negative watch, but confirmed AAA credit rating of France. 

LME nickel prices largely moved stably during the Asian trading hours, but advanced to hit a high of USD 18,625/mt during the European trading hours on upbeat news from the US. Finally, LME nickel prices closed at USD 18,510/mt, up by USD 610/mt from a day earlier. Fitch put credit ratings of many European countries into negative watch, but only exerting limited impact on LME nickel prices.

LME nickel prices rebounded above USD 18,000/mt last Friday. Although market sentiment eased to certain extent, cautious remains in the market. It is expected that LME nickel prices will continue to fluctuate on Monday, with support at USD 18,000/mt. In China’s domestic nickel spot market, spot nickel prices will advance to the RMB 126,500-129,000/mt on Monday.