SMM Morning Review - 2012/2/29 Nickel Market

SHANGHAI, Feb. 29 (SMM) -- LME nickel for delivery in three months opened at USD 20,150/mt and closed at USD 19,850/mt overnight, down USD 282/mt from a day earlier, with the highest price at USD 20,360 mt and the lowest price at USD 19,720/mt. Daily trading volumes were 2,786 lots, up by 957 lots. Positions were 105,999 lots, down by 1,469 lots. LME nickel inventories were 98,442 mt, up 1,044 mt from a day earlier.

During Tuesday’s Asian trading hours, LME nickel prices hit a high at USD 20,360/mt and advanced above 5-day moving average at the tail of the trading. During the European and US trading hours, the US announced its January durable goods orders slipped by 4.0%, the sharpest decline since January 2009, which dampened consumer confidence. In response, LME nickel prices were weighed down and finally closed at USD 19,850/mt after profit-taking.

Transactions improved in global major base metal markets on Tuesday as the US Richmond Fed Manufacturing Index and Conference Board Consumer Confidence Index were both better than market expectation. In general, the upbeat data from the US suggests that the US economy is recovering, boosting market optimism. In response, the US equity market and LME base metal prices largely closed with gains overnight. It is expected that market sentiment is moderate before release of China’s PMI on Wednesday.

SMM expects that LME nickel prices may rebound slightly after weighed down by disappointing durable goods orders during overnight European and US trading hours, and may move in the RMB 19,700-20,200/mt on Wednesday. Affected by overnight LME nickel price decline, spot nickel prices will fall to the RMB 137,000-140,000/mt range on Wednesday.