SHANGHAI, Apr. 17 (SMM) -- In the Shanghai nickel spot market, mainstream traded prices for Jinchuan nickel were between RMB 130,000-130,500/mt, and RMB 132,000-132,500/mt for Russian nickel. In the afternoon business, markets were very cautious toward transactions due to falling LME nickel prices, and transaction volumes decreased significantly as well. Some traders cut prices for Jinchuan nickel to RMB 131,500-131,800/mt and lowered prices for Russian nickel to RMB 129,500-198,000/mt in an effort to boost sales, but trading activity was still quiet.
According to a recent SMM survey, 70% of market players believe nickel prices will begin to fall back. Investors became more concerned about the euro zone economy, since yields on Spanish 10-year government bonds rose to a 4-month high of 5.99% on April 10. Although euro zone finance ministers agreed to expand the EU bailout fund to EUR 700 billion, actual effects remain to be seen. Spain will usher in a debt repayment peak period in April, and other debt-ridden European countries like Italy and Portugal may be affected if no appropriate response is reported. In addition, China’s 1Q GDP growth was lower than expected, spurring market concerns over China’s economic growth. These factors will continue to exert great pressures on LME base metal prices this week.
The remaining 30% believe LME nickel prices will continue to fluctuate this week. Although the euro weakened versus US dollar, euro zone debt problems only triggered concerns. Weak US economic data refueled market expectations of US QE3 implementation, and US dollar index will fall back after strengthening to break through 80, helping limit any declines in LME nickel prices. Furthermore, the LME’s nickel report also shows markets are still confident in LME nickel price trends.