SHANGHAI, Jul. 2 (SMM) – LME nickel prices overnight opened at USD 16,325/mt, with the high end USD 16,830/mt, finding support at USD 16,325/mt. Finally, LME nickel prices closed at USD 16,799/mt, up USD 579/mt. Trading volumes decreased by 773 lots to 3,499 lots, and total position was 111,308 lots, up 145 lots. LME nickel inventories were 102,852 mt, down 894 mt.
Spanish government bond yields rose by 7%, and German unemployment data was worse than expected, causing LME nickel prices to inch down. Despite the news reported from EU summit that EUR 120 billion of bailout funds will be released boosted the market briefly, the positive news dwindling as many European countries were doubtful about the plan, pushing down LME nickel prices to close at USD 16,220/mt, down USD 63/mt.
The EU summit resulted in an agreement on job stimulus and economic growth plan with concession of Germany, and pledge that European debt crisis will be flexibly coped with bailout funds. As a result, base metals prices rebounded, and LME nickel prices closed at USD 16,799/mt, up USD 579/mt.
LME base metal prices surged on Friday due to positive news reported from the EU summit. EU stated on its website June 29th that it will flexibly use bailout funds t cope with European debt crisis, and emphasized to break the vicious circle between sovereign credit loans and the banking sector. EU leaders agreed to take immediate measures to reduce loan costs of Italy and Spain, and found a single supervision institution for the eurozone banking sector. As a result, risk appetite grew, and base metals prices will likely rise further.
LME nickel prices should move between USD 16,500-17,000/mt today, and domestic spot nickel prices should rise to RMB 120,000-124,000/mt.