SHANGHAI, May 10 (SMM) – LME nickel prices overnight opened at USD 17,045/mt, with the high end USD 17,418/mt, finding support at USD 17,070/mt. Finally, LME nickel prices closed at USD 17,260/mt, down USD 100/mt. Trading volumes decreased by 901 lots to 3,048 lots, and total position was 110,071 lots, down 2,363 lots. LME nickel inventories were 105,792 mt, up 150 mt.
The euro plummeted due to volatile political situation in Greece and France and surging government bond yields in Spain and Italy, pushing down LME nickel prices. LME nickel prices plummeted to a 6-mohth low at USD 17,070/mt, but due to news that Greece will receive EUR 4.2 billion of bailout funds on Thursday, LME nickel closed at USD 17,260/mt, down USD 100/mt.
Capital flowed to the US dollar as risk sentiment improved due to concerns that uncertainty in the eurozone will affect global economic growth. Greece's left wing Syriza urged postponement in debt repayment and political reform and abolish credit tightening policies. The EU will likely change bailout plan for Greece. The market pared demand for commodity concerns Greece's debt crisis will exacerbate and affect global economy more significantly. As a result, investors aggressively bought US dollars, pushing up the US dollar index to a record high since March 19th, and weighing down global finance and commodity markets. In this context, LME base metal prices overnight fell sharply, with LME three-month copper contract prices falling below USD 8,000/mt level and hitting a near-term low. But the EU's bailout funds to Greece and increased factory orders in Germany boosted metal prices.
LME nickel prices should move between USD 17,000-17,500/mt today and spot nickel prices should fall to RMB 127,500-130,500/mt.