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LME nickel prices plummeted after opening during Asian trading hours. As the Germany government bond sales were neutral and European commercial banks' overnight deposits at the European Central Bank hit a new record high, allowing markets to be cautious toward euro assets. As a result, LME nickel prices fluctuated narrowly and finally closed at USD 18,775/mt.
Sources report that Spanish government is considering applying for loans from the European Union’s rescue fund and the International Monetary Fund to finance the restructuring of the country’s financial industry, and European commercial banks' overnight deposits at the European Central Bank hit a new record high on January 3rd, both triggering market fears of European debt crisis. In response, European financial markets weakened, and US dollar index climbed, with LME base metal prices falling as a result. In general, European debt crisis and the possibility that the euro zone economy will slip into recession will be major factors restricting the upward room for metals prices.
SMM predicts LME nickel prices will continue to fluctuate today, with support expected at USD 18,000/mt. In domestic nickel spot market, nickel prices are expected to hover between RMB 128,500-131,000/mt given slight declines in LME nickel prices overnight and sluggish downstream demand.
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