SMM Daily Review - 2012/2/13 Nickel Market

SHANGHAI, Feb.14 (SMM) -- The Greek Parliament passed the controversial austerity bill in order to win the second round bailout from the European Union (EU) and the International Monetary Fund (IMF). Inspired by this news, LME nickel prices advanced during Monday's Asian trading hours after opening at USD 20,800/mt. During the European trading hours, the EU and IMF will conduct a two-week long appraisal on Portugal to monitor the implementation of its debt plan. Market expectation towards the appraisal result, however, was not optimistic, as they concerned that Portugal may become the second Greece since yields rate of Greek government bond surged. Although Greece passed the austerity plan, market concern over Greece and Portugal may restrict LME nickel prices from rising further.

In the Shanghai nickel spot market, mainstream traded prices of nickel from Jinchuan Group were between RMB 144,000-144,500/mt, and mainstream traded prices of nickel from Russia were between RMB 142,700-143,000/mt during the morning trading hours. During the afternoon trading hours, mainstream traded prices of nickel from Russia advanced to RMB 143,000-143,500/mt, and mainstream traded prices of nickel from Jinchuan Group did not change much. As LME nickel prices slipped sharply last Friday, offers of spot nickel declined on Monday, attracting some downstream bargain hunters. In this context, transactions improved from several days.

Based on result of an SMM survey on market sentiment, 40% market players believe that LME nickel prices will continue to fluctuate in this coming week since the outlook of European debt crisis is obscure and market trend is not clear. 

30% market players hold that LME nickel prices will pare last week’s losses and will advance further as progress is reported for the Greek debt crisis and since the US economy continue to recover. In addition, the low interest rate from the US will lend further support for base metals and other risk assets.

According to the remaining 30% market players expect, the euro zone faces many challenges at present, and outlook of the European debt crisis is obscure. LME nickel prices fell below 5-day and 10-day moving average consecutively after closing with sharply losses last Friday. Technically speaking, LME nickel prices are tend to decline further i this coming week, if prices fall below 20-day moving average.