SHANGHAI, Jun. 20 (SMM)-LME nickel market overnight opened at USD 16,650/mt, with the highest and lowest level of USD 17,100/mt and USD 16,550/mt, respectively. Finally, LME nickel market ended at USD 170,800/mt, up USD 420/mt from a day earlier. Transactions for the day were 2,775 lots, up 915 lots. Positions were 114,725 lots, down 2,128 lots. Inventories were 102,894 mt, down 42 mt.

As market worries over Spain’s debt issues weighed down the market, LME nickel prices during Asian trading hours slid to USD 16,550/mt. During the European and US trading hours, market expectations over an introduction of new stimulus measures increased, as the US Operation Twist is set to expire at the end of June, and as the global economic recovery is sluggish. Such an expectation drove up the US equities, and LME nickel prices also advanced, but fell back at the tail of trading. Market rumors were heard that German is poised to allow the euro-zone’s EUR 750 billion to buy bonds, and so the euro strengthened against the dollar, adding to more rising momentum for LME nickel prices. Although German officials later denied the rumors, the euro remained strong, helping support LME nickel prices. Finally, LME tin prices finished at USD 17,080/mt, up USD 420/mt from a day earlier.

LME metals market overnight inched up during European trading hours following the ongoing G-20 summit and optimism towards the US Federal Reserve meeting, despite of market fears over the soaring Spanish bonds’ yield. Markets expect that the US Federal Reserve will announce new stimulus measures to boost the economy, and this will weigh down the US dollar. Although the Fed may not introduce the QE3 during the meeting, markets expect Operation Twist, which is going to be expired at the end of June, to be extended. 

Market focus is now on the US Federal Reserve meeting. If positive news comes from the meeting, LME nickel prices will be supported. LME nickel prices are expected to move between USD 16,900-17,400/mt, and domestic spot nickel prices will hover in the RMB 122,500-126,500/mt range on Wednesday.