SHANGHAI, Mar.23 (SMM) -- LME nickel for delivery in three months opened at USD 18,875/mt and closed at USD 18,419/mt, down USD 389/mt, with the highest price at USD 18,880/mt and the lowest price at USD 18,266/mt. Daily trading volumes were 3,499 lots, up 1,599 lots. Positions were 97,349 lots, up 169 lots. LME nickel inventories were 97,788 mt, down 60 mt.
LME nickel prices were largely on downward track and hit a low at USD 18,266/mt. Finally, LME nickel prices closed at USD 18,419/mt, down USD 389/mt from a day earlier. Downbeat PMI from China and the euro zone weighed on market sentiment and dragged down base metal prices.
HSBC's preliminary China purchasing managers index (PMI) fell to a four-month low in March, lower than 50 for the fifth consecutive month. The new low of new orders index in four months indicated waning demand both at home and abroad. What is more worrying is that the slowdown in manufacture activities began to affect employment market. Germany and France’s preliminary PMI both fell sharply below 50, and industrial orders also contracted significantly in January in the euro zone. The contraction of manufacture activities in China and the euro zone indicate that economic growth may fall further, which may curb demand for raw materials to great extent. In this context, LME base metal prices largely closed with losses overnight.
The weak PMI from China and euro zone stoked market concern over base metal demand perspective. SMM expects that LME nickel prices will fall to test support at USD 18,000/mt if prices fall below USD 18,400/mt. In China's nickel spot market, overnight LME nickel decline will weigh on spot nickel prices to move in the RMB 133,500-134,500/mt range on Friday.