SHANGHAI, Jun. 19 (SMM) - LME nickel market overnight opened at USD 16,900/mt, with the highest and lowest level of USD 17,040/mt and USD 16,645/mt, respectively. Finally, LME nickel market closed at USD 16,660/mt, down USD 190/mt from a day earlier. Transactions were 1,860 lots, down 190 lots. Positions were 116,853 lots, down 825 lots. Inventories were 102,936 mt, down 624 mt.
Market worries over a possible Greek exit eased after the result of second round of election in Greece. As a result, LME nickel prices opened high during Asian trading hours, and briefly rose as high as USD 17,040/mt. Later, the yield of Spanish government bonds rose above 7%, rekindling market fears over the European debt issues. During the European and US trading hours, LME nickel prices retreated to close at USD 16,660/mt, down USD 190/mt.
LME metals overnight fell back from early gains since the soaring yield of Spanish government bonds retriggered market worries over the European debt issues, which overshadowed the election result in Greece. On June 19, the yield of Spanish 10-year government bonds climbed above 7%, a Euro-era record high, significantly increasing the country’s borrowing costs. Market worried that the Euro zone may not be strong enough to response if the debt issues spread to large economies in the region. As a result, investors sold off metals at highs, weighing down the market.
As of Monday, the yield of Spanish government bonds rose by 26 basis points to 7.18%, briefly hitting a Euro-era high of 7.30%. Market attention is now on the G-20 meeting. The main topic of the meeting will focus on the way to resolve the European debt issues. With the lack of growth momentum, major economies may act together to boost the global economy. SMM expects LME nickel prices between USD 16,500-17,400/mt on Monday, and domestic spot nickel prices will hover in the RMB 121,000-124,500/mt range. "