SMM Daily Review - 2012/3/12 Nickel Market

SHANGHAI, Mar. 13 (SMM) -- During Monday’s Asian trading hours, LME nickel prices fell after a high open at USD 19,340/mt, and then fluctuated between 5-day moving average and 10-day moving average after failing to break through 10-day moving average.

During the morning trading hours in Shanghai nickel spot market, mainstream traded prices of nickel from Jinchuan Group were in the RMB 136,000-136,200/mt range, and mainstream traded prices of nickel from Russia were in the RMB 135,600-135,800/mt range, slightly higher than last Friday’s level, but with lackluster trading sentiment reported. During the afternoon trading hours, Jinchuan nickel was largely traded around RMB 136,000/mt, and Russian nickel largely around RMB 135,700/mt.

Based on result of an SMM survey on market sentiment, 21% market players believe that LME nickel prices will advance in this coming week. The US non-farm employment data boosted market sentiment. In addition, China’s eased inflationary pressure may fuel expectation of looser monetary policy. LME nickel prices, therefore, are expected to find support at USD 18,800/mt and will climb to test 10-day moving average.

43% market players hold that LME nickel prices will continue to remain fluctuation trend in this coming week. The positive result of Greek debt swap deal curbed further deterioration in the European debt crisis. The US non-farm employment data also boosted market sentiment. However, considering the sluggish downstream demand, they believe that any room for LME nickel prices to advance further will be limited.

The remaining 36% market players expect that LME nickel prices will continue to slip in this coming week. The US economic data was better than market expectation, denting expectation of stimulus policy. In addition, the US dollar index was above 60-day moving average, weighing on base metal prices in the short term. Coupled with sluggish downstream consumption, LME nickel prices still face downward pressure.