SMM Daily Review - 2012/3/19 Nickel Market

SHANGHAI, Mar. 20 (SMM) -- LME nickel prices advanced to hit a high at USD 19,100/mt after opening at USD 19,050/mt during Monday’s Asian trading hours, but later fluctuated narrowly between USD 19,000-19,050/mt. The weak economic data from the US dented investor’s confidence. Coupled with market concern over sluggish demand from stainless steel producers, LME nickel prices hit a low at USD 18,830/mt as of 4:35 pm.

In the Shanghai nickel spot market, Jinchuan Group cut ex-works nickel prices by RMB 3,000/mt to RMB 135,000/mt. During the morning trading hours, mainstream traded prices of nickel from Jinchuan Group were in the RMB 135,500-135,800/mt range, and mainstream traded prices of nickel from Russia were in the RMB 134,700-135,000/mt range. During the afternoon trading hours, traders lowered prices slightly to promote sales, with average traded prices of Jinchuan nickel around RMB 135,500/mt and Russian nickel around RMB 134,500/mt.

Based on result of an SMM survey on market sentiment, 25% market players expect LME nickel prices will be well supported at USD 19,000/mt after a long fluctuation period. The eased European debt crisis has left room for euro to rebound, which will help base metal prices to advance. As LME nickel prices have already experienced correction, it is expected that LME nickel prices are more likely to bottom out in this coming week.

46% market players believe that the widely-accepted global economic slowdown, combined with dashed hope that the US will implement QE3, will make LME nickel prices accelerate declines and test support at USD 18,500/mt in the coming week.

The remaining 29% market players hold that although the temporarily-eased European debt crisis will lend support for base metal prices to certain extent, the sluggish domestic demand and no clear positive signals from China’s NPC and CPPCC will make LME nickel prices continue to fluctuate.