SMM Morning Review - 2011/12/22 Nickel Market

SHANGHAI, Jun. 22 (SMM) -- LME nickel LME nickel for delivery in three months opened at USD 18,920/mt and closed at USD 18,945/mt overnight, up by USD 94/mt from a day earlier, with the highest price at USD 19,069/mt and the lowest price at USD 18,537/mt. Daily trading volumes were 2,031 lots, down by 1,376 lots. Positions were 111,142 lots, up by 5,224 lots from a day earlier. LME nickel inventories were down by 186 mt to 87,900 mt.     

The European Central Bank announced to provide banks EUR 489 billion of three-year loans, vaulting market expectation of EUR 293 billion. The move by ECB boosted risk appetite and sent base metal prices higher. However, base metal prices quickly sapped early gains and fell back, as market concerned that the long-term loan was indicative of a much deeper crisis in the banking community.

Boosted by EBC announcement to provide banks EUR 489 billion of three-year loans, LME nickel prices advanced to certain extent to hit a high of USD 19,069/mt. However, LME nickel prices fell to certain extent and closed at USD 18,945/mt during the European trading hours following Standard & Poor’s downgrade adjustment of Hungary’s credit rating.

LME nickel prices meet resistance at USD 19,000/mt. It is expected that LME nickel prices will continue to fluctuate on Thursday, as participants will exit market ahead of holiday. In China’s nickel spot market, overnight slight LME nickel price increase will limitedly boost spot nickel prices, and SMM expects that spot nickel prices will move in the RMB 128,000-130,500/mt range on Thursday.