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SMM Morning Review - 2012/5/14 Nickel Market
May 14,2012 10:37CST
smm insight
Source:SMM
LME nickel prices overnight opened at USD 17,160/mt, with the high end USD 17,250/mt, finding support at USD 17,005/mt.

SHANGHAI, May 14 (SMM) – LME nickel prices overnight opened at USD 17,160/mt, with the high end USD 17,250/mt, finding support at USD 17,005/mt. Finally, LME nickel prices closed at USD 17,115/mt, down USD 65/mt. Trading volumes decreased by 400 lots to 2,081 lots, and total position was 109,942 lots, up 242 lots. LME nickel inventories were 106,302 mt, down 60 mt.

Domestic PPI released last Friday was disappointing, but falling CPI indicated inflation is curbed, causing speculations of deposit reserve ratio cut to grow. In this context, LME nickel prices fluctuated and rose slightly. Mixed US economic data kept the US dollar index above 80, weighing pressure on the market. As a result, LME nickel prices closed at USD 17,115/mt, down USD 65/mt.

China's central bank announced May 12th it will lower deposit reserve ratio for financial institutions starting May 18th by 0.5 percentage points, the second decrease this year. Deposit reserve ratio for large financial institutions will be 20.0% after adjustments, with 16.5% at small financial institutions. The Central Bank lowered deposit reserve ratio on February 24th 2012 last time, and it unexpectedly cut deposit reserve ratio given sluggish domestic and oversea demand and weak domestic production, combined with reducing expectations of QE3 implementation and improving European debt crisis, so as to ease cash flow problems in the market and maintain steady economic growth.

LME nickel prices should rise to USD 17,100-17,600/mt today, and domestic spot nickel prices should move between USD 127,000-131,000/mt.
 

LME nickel prices

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