SHANGHAI, Jun. 12 (SMM) – LME nickel prices last Friday opened at USD 16,974/mt, with the high end USD 17,295/mt, finding support at USD 16,821/mt. Finally, LME nickel prices closed at USD 17,253/mt, up USD 434/mt. Trading volumes decreased by 496 lots to 3,642 lots, and total position was 116,984 lots, up 1,302 lots. LME nickel inventories were 104,484 mt, down 834 mt.

LME nickel prices rose significantly yesterday. Eurozone finance ministers agreed to supply EUR 100 billion of bailout funds to Spain, causing LME nickel prices to open higher. On the other hand, the large growth of US nickel exports and stainless steel imports strongly supported nickel prices. Finally, LME nickel prices closed at USD 17,253/mt, up USD 434/mt.

Arbitrage operation weakened despite LME base metals prices closed with gains. Although Spain asked for financial support for its banking sector, concerns over eurozone debt crisis did not ease. Greece's general election is a focus of markets. Besides, Fitch downgraded credit ratings of Banco Santander and Banco Bilbao Vizcaya Argentaria, with the outlook negative. As a result, crude oil prices plunged, while the US dollar index rose steadily, pushing down base metal prices.

US imported 115,145 mt of stainless steel in May, up 23.9% compared to 92,951 mt in the previous month, and a record high in 15 months. US stainless steel output and imports grew significantly recently, and are expected to push up nickel prices. But due to ongoing European debt crisis, nickel prices should meet resistance.

In this context, LME nickel prices should move between USD 16,900-17,300/mt today, and domestic spot nickel prices should move between RMB 121,500-127,000/mt.