Shanghai, May 22 (SMM) – In the Shanghai nickel market, mainstream traded prices of Jinchuan nickel in the morning business were between RMB 126,800-127,200/mt, and RMB 124,700-124,900/mt for Russian nickel. During the afternoon business, the rising LME nickel prices helped push quotations for Jinchuan nickel up to RMB 127,200-127,500/mt, and Russian nickel up to RMB 124,900-125,000/mt. LME nickel price gains and the release of positive news reduced traders’ willingness to move goods, leading to low market transactions.
According to the latest SMM survey, approximately 40% market players expect nickel prices to drop further this week due to the following factors. First, no progress has been reported for Greek issues, and debt issues in Spain and Italy urgently need to be resolved. Second, the US dollar index last Friday climbed to a high of 2012, which will cap nickel price rallies. Third, domestic demand remains weak, giving no support for higher prices.
Around 40% of market players believe, however, nickel prices will experience fluctuations this week. The message from G8 Summit boosted market sentiment, and if more positive news comes from the euro-zone leader meeting to be held this Wednesday, market confidence will be supported. This will open a room for LME nickel prices to rebound, but markets will remain cautions before the meeting.
The rest 20% are optimistic towards prices this week. They believe the US dollar will drop due to overbought, and on Monday, the index did fall back. A weak US dollar index will support LME nickel prices. Besides, the positive news from G-8 meeting has boosted market sentiment, with a sign of upward momentum technically. Hence, the optimists expect LME nickel prices to rally between USD 17,000-17,200/mt.