SMM Morning Review - 2012/1/9 Nickel Market-Shanghai Metals Market

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SMM Morning Review - 2012/1/9 Nickel Market

Data Analysis 09:56:19AM Jan 09, 2012 Source:SMM

SHANGHAI, Jun. 9 (SMM) -- LME nickel LME nickel for delivery in three months opened at USD 18,700/mt and closed at USD 18,755/mt, up by USD 155/mt from a day earlier, with the highest price at USD 18,924/mt and the lowest price at USD 18,490/mt. Daily trading volumes were 1,681 lots, up by 181 lots, Positions were 108,210 lots, up by 289 lots from a day earlier. LME nickel inventories were 89,838 mt, unchanged from a day earlier.

During last Friday’s Asian trading hours, LME nickel prices fell slightly due to new low of Shanghai Composite Index. However, LME nickel prices advanced all the way during the European trading hours owing to better-than-expected non-farm employment data from the US. At the tail of the trading LME nickel prices slipped slightly and closed at USD 18,755/mt following Fitch’s downward adjustment of Hungary’s credit rating.

Last Friday’s US non-farm employment data were better than market expectation, suggesting that US economy is recovering. Meanwhile, the stronger US dollar index also showed that the US dollar is increasingly supported by real economy recovery. If the US non-farm employment data continues to be improve, possibility for the Federal Reserve to cut QE3 will be even lower, which will lend upward momentum for the US dollar. In this context, base metal prices will be relatively weak. The European jitters remained in the market. Fitch cut Hungary’s sovereign credit rating into “BB+”, and put its outlook into negative. European banks’ deposit at the European Central Bank hit a new high of EUR 455.299 billion last Friday night, and Italy’s 10-year government bond yield returned above 7%. In addition, employment data and orders data were both lower than market expectation in the Europe, resulting in relatively pessimistic sentiment.

Last Friday’s downward adjustment of Hungary’s credit rating further weighs on the weak European market. Coupled with sluggish performance of China’s economy, LME nickel prices lack upward momentum. In the Shanghai nickel spot market, pre-holiday stock replenishments from downstream consumers may support spot nickel prices to certain extent. SMM expects that LME nickel prices will move in the USD 18,400-18,900/mt range, and spot nickel prices in the Shanghai market will fluctuate in the RMB 129,500-131,700/mt range on Monday.

 

Price

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SMM #1 Nickel
May.21
98900.0
500.0
(0.51%)
#1 JinChuan Nickel
May.21
99550.0
475.0
(0.48%)
#1 Import Nickel
May.21
98200.0
475.0
(0.49%)
JinChuan B&C
May.21
1700.0
0.0
(0.00%)
Russian nickel premium
May.21
300.0
-25.0
(-7.69%)

SMM Morning Review - 2012/1/9 Nickel Market

Data Analysis 09:56:19AM Jan 09, 2012 Source:SMM

SHANGHAI, Jun. 9 (SMM) -- LME nickel LME nickel for delivery in three months opened at USD 18,700/mt and closed at USD 18,755/mt, up by USD 155/mt from a day earlier, with the highest price at USD 18,924/mt and the lowest price at USD 18,490/mt. Daily trading volumes were 1,681 lots, up by 181 lots, Positions were 108,210 lots, up by 289 lots from a day earlier. LME nickel inventories were 89,838 mt, unchanged from a day earlier.

During last Friday’s Asian trading hours, LME nickel prices fell slightly due to new low of Shanghai Composite Index. However, LME nickel prices advanced all the way during the European trading hours owing to better-than-expected non-farm employment data from the US. At the tail of the trading LME nickel prices slipped slightly and closed at USD 18,755/mt following Fitch’s downward adjustment of Hungary’s credit rating.

Last Friday’s US non-farm employment data were better than market expectation, suggesting that US economy is recovering. Meanwhile, the stronger US dollar index also showed that the US dollar is increasingly supported by real economy recovery. If the US non-farm employment data continues to be improve, possibility for the Federal Reserve to cut QE3 will be even lower, which will lend upward momentum for the US dollar. In this context, base metal prices will be relatively weak. The European jitters remained in the market. Fitch cut Hungary’s sovereign credit rating into “BB+”, and put its outlook into negative. European banks’ deposit at the European Central Bank hit a new high of EUR 455.299 billion last Friday night, and Italy’s 10-year government bond yield returned above 7%. In addition, employment data and orders data were both lower than market expectation in the Europe, resulting in relatively pessimistic sentiment.

Last Friday’s downward adjustment of Hungary’s credit rating further weighs on the weak European market. Coupled with sluggish performance of China’s economy, LME nickel prices lack upward momentum. In the Shanghai nickel spot market, pre-holiday stock replenishments from downstream consumers may support spot nickel prices to certain extent. SMM expects that LME nickel prices will move in the USD 18,400-18,900/mt range, and spot nickel prices in the Shanghai market will fluctuate in the RMB 129,500-131,700/mt range on Monday.