SHANGHAI, Feb.9(SMM) -- During Wednesday’s Asian trading hours, LME nickel prices initially declined after opening, but later advanced along with surge in China's stock market after two days’ correction. In addition, market optimism was boosted due to expectation that Greek government will soon reach agreement to avoid debt default. In response, the euro versus the US dollar index rallied to the highest level since mid-December.
Although the euro extends robust upward momentum recently, uncertainties over the euro zone debt crisis still remain. It is expected that Portugal may also need bailout to cope with difficulties. Meanwhile, data from Germany showed that its seasonally adjusted industrial output for December slipped sharply, which will add uncertainties on the euro. As of 4:00 pm Wednesday, LME nickel prices broke through key resistance levels and were above 240-day moving average and USD 22,000/mt. RSI indicator also suggested overbuying, indicating strong resistance above. As LME nickel prices have rallied for several consecutive days, profit-taking during the European trading hours may weigh on LME nickel prices. However, if LME nickel prices are stable to stabilize above USD 22,000/mt, prices will tend to test USD 22,200-22,400/mt.
In the Shanghai nickel spot market, mainstream traded prices of nickel from Jinchuan Group were between RMB 145,500-145,800/mt, and mainstream traded prices of nickel from Russia were between RMB 144,200-144,500/mt during the morning trading hours. As LME nickel prices surged during the afternoon trading hours, spot nickel prices also advanced, with mainstream traded prices of Jinchuan nickel at RMB 146,000/mt and mainstream traded prices of Russian nickel at RMB 145,000/mt. Transactions were still sluggish due to lackluster demand, so prices spread between spot nickel and LME nickel futures further expanded.