SMM Daily Review - 2012/2/20 Nickel Market-Shanghai Metals Market

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SMM Daily Review - 2012/2/20 Nickel Market

SMM Insight 09:11:22AM Feb 21, 2012 Source:SMM

SHANGHAI, Feb.21 (SMM) -- LME nickel prices opened with significant gains during Monday’s Asian trading hours, despite of sharp decline last Friday, so domestic spot nickel prices were also flat from last Friday’s level. During the morning trading hours, mainstream traded prices of nickel from Jinchuan Group were between RMB 139,800-140,000/mt, and mainstream traded prices of nickel from Russia were between RMB 138,800-139,000/mt. During the afternoon trading hours, spot nickel prices were virtually unchanged, as LME nickel prices did not fluctuate widely. Wait-and-see sentiment was relatively strong amid recent LME nickel price vitality, so overall trading volumes were low.

Based on result of an SMM survey on market sentiment, 60% market players believe that LME nickel prices will continue to extend weak momentum in this coming week. Last week, LME nickel prices fell to hit a low of USD 19,410/mt, with support only at 60-day moving average. In addition, positions of LME nickel contracted significantly, showing players’ weak confidence towards market outlook. In addition, technical indicators suggested LME nickel prices were relatively weak and may meet resistance to rebound in the short term. With regard to the eurozone, negative news may be released at any time since current economic condition was weak and as the European debt crisis has been haunting market for a long time. With regard to domestic market, the steady decline in real estate price, stranded plan of pension fund, halted construction of high speed railway projects all suggested dim condition of domestic economy. The gloomy outlook of global economy may dampen risk appetite and may force funds turn to US dollar, gold and other risk aversion assets, which will weigh on LME nickel prices. In addition, the sluggish demand in spot nickel market will not lend support for nickel prices in the short term.

The remaining 40% market players expect that LME nickel prices will rebound in this coming week. In the euro zone, market expects that Greece will be able to receive the second round bailout fund since Greek parliament has passed austerity plan, fueling expectation that euro will rebound in the short term. Crude oil climbed to USD 105/barrel, and gold also advanced on risk version sentient. It is expected that commodity prices will stabilize, which will lend support for LME nickel prices to rebound. In China, China's central bank announced to cut bank requirement reserve ratio, which will improve liquidity in the short term. In this context, stock market and futures market will receive upward momentum and will be boosted to certain extent.

 

SMM Daily Review - 2012/2/20 Nickel Market

SMM Insight 09:11:22AM Feb 21, 2012 Source:SMM

SHANGHAI, Feb.21 (SMM) -- LME nickel prices opened with significant gains during Monday’s Asian trading hours, despite of sharp decline last Friday, so domestic spot nickel prices were also flat from last Friday’s level. During the morning trading hours, mainstream traded prices of nickel from Jinchuan Group were between RMB 139,800-140,000/mt, and mainstream traded prices of nickel from Russia were between RMB 138,800-139,000/mt. During the afternoon trading hours, spot nickel prices were virtually unchanged, as LME nickel prices did not fluctuate widely. Wait-and-see sentiment was relatively strong amid recent LME nickel price vitality, so overall trading volumes were low.

Based on result of an SMM survey on market sentiment, 60% market players believe that LME nickel prices will continue to extend weak momentum in this coming week. Last week, LME nickel prices fell to hit a low of USD 19,410/mt, with support only at 60-day moving average. In addition, positions of LME nickel contracted significantly, showing players’ weak confidence towards market outlook. In addition, technical indicators suggested LME nickel prices were relatively weak and may meet resistance to rebound in the short term. With regard to the eurozone, negative news may be released at any time since current economic condition was weak and as the European debt crisis has been haunting market for a long time. With regard to domestic market, the steady decline in real estate price, stranded plan of pension fund, halted construction of high speed railway projects all suggested dim condition of domestic economy. The gloomy outlook of global economy may dampen risk appetite and may force funds turn to US dollar, gold and other risk aversion assets, which will weigh on LME nickel prices. In addition, the sluggish demand in spot nickel market will not lend support for nickel prices in the short term.

The remaining 40% market players expect that LME nickel prices will rebound in this coming week. In the euro zone, market expects that Greece will be able to receive the second round bailout fund since Greek parliament has passed austerity plan, fueling expectation that euro will rebound in the short term. Crude oil climbed to USD 105/barrel, and gold also advanced on risk version sentient. It is expected that commodity prices will stabilize, which will lend support for LME nickel prices to rebound. In China, China's central bank announced to cut bank requirement reserve ratio, which will improve liquidity in the short term. In this context, stock market and futures market will receive upward momentum and will be boosted to certain extent.