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SMM Morning Review – 2012/5/29 Nickel Market
May 29,2012 10:26CST
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Source:SMM
On Tuesday, LME nickel market will range between USD 16,800-17,200/mt, and domestic spot nickel prices will move between RMB 124,500-126,800/mt.

SHANGHAI, May 29 (SMM)-LME nickel market overnight opened at USD 17,075/mt, with the highest and lowest level of USD 17,167/mt and USD 16,975/mt, respectively. Finally, LME nickel market closed at USD 16,998/mt, down USD 61/mt from a day earlier. Transactions for the day were 861 lots, down 799 lots. Positions were 108,704 lots, up 419 lots. Inventories were 106,122 mt, up 966 mt.

During Asian trading hours, the euro gained against the dollar, sending LME nickel prices up.  Markets were quiet during European and US trading hours due to the holiday break. At the tail of trading, the yields on Spain’s 10-year bonds surged to 6.47. Together with the news that Moody’s cut the credit rating of 16 Spanish banks, LME nickel market came under downward pressures, with prices moving lower. Finally, LME tin prices ended at USD 16,998/mt, down USD 61/mt from a day earlier.

The Greek opinion polls show that pro-bailout New Democracy party claimed a slight lead over anti-bailout Syriza party, helping improve market sentiment. The US dollar index dropped, sending metals prices up. Later, the US dollar index returned to around 82.40, given the lack of growth momentum in the Europe, worries over Spain’s banking system, and borrowing costs in some European countries. As a result, metals experienced corrections along with profit-taking by investors. In addition, market concerns over Spain remained, and the yield on the country’s bonds surged as a result. However, the news that Chinese government will introduce new stimulus measures gave support to the market.

The easing of market concerns, the absorption of negative news and technical rebounds helped support LME nickel prices. Since market worries focus on the Greek debt issues, debt problems in Spain and Italy have been neglected. The issues in the two countries will continue to deteriorate before the resolution of Greek debt issues. This will negatively affect LME nickel price movements. On Tuesday, LME nickel market will range between USD 16,800-17,200/mt, and domestic spot nickel prices will move between RMB 124,500-126,800/mt.
 

LME nickel market
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