SMM Morning Review - 2012/1/20 Nickel Market

SHANGHAI, Dec. 20 (SMM) -- LME nickel LME nickel for delivery in three months opened at USD 19,620/mt and closed at USD 20,220/mt overnight, up by USD 668/mt from a day earlier, with the highest price at USD 20,250 mt and the lowest price at USD 19,551/mt. Daily trading volumes were 2,791 lots, up by 772 lots. Positions were 94,850 lots, down by 1,964 lots. LME nickel inventories were 91,788 mt, down 120 mt from a day earlier.

LME nickel prices advanced slightly during Thursday’s trading hours along with domestic stock market growth. During European trading hours, LME nickel prices rallied to hit USD 20,000/mt mark due to positive result of French and Spanish government bond auction. Finally, LME nickel prices closed at USD 20,220/mt.

The US Department of Labor announced last Thursday that last week’s initial jobless claim fell to 352,000, the lowest since April 2008, with jobless claim decline most striking last Friday since September, 2005, which strongly boosted market sentiment. In addition, yields of French EUR 8 billion medium-to-long term government bond fell, and Spain successfully sold EUR 6.6 billion of long-term government bond, exceeding pervious target by EUR 4.5 billion, with yields of 10-year government bond falling from 6.97% in November to 5.43% in November. Boosted by positive government bond auction, the euro was firm, and the US dollar fell to 80 mark. In response, LME base metal prices rallied across the board.

LME nickel price posted the largest increase overnight to stand firm at USD 20,000/mt overnight, and is expected to advance further on Friday. In China’s spot nickel market, spot nickel prices may advance due to overnight LME nickel price hike, and shall move in the RMB 139,000-140,000/mt on Friday.