SHANGHAI, Jul. 3 (SMM)-LME nickel market overnight opened at USD 16,650/mt, with the highest and lowest level of USD 16,766/mt and USD 16,600/mt, respectively. Finally, LME nickel market closed at USD 16,730/mt, down USD 69/mt from a day earlier. Transactions for the day were 1,954 lots, down 1,545 lots. Positions were 110,009 lots, down 1,299 lots. Inventories were 103,350 mt, up 498 mt.

The CFLP China manufacturing PMI for June dropped from 50.4 to 50.2, denting the market. As a result, LME nickel prices edged down after a low open. Later, the euro-zone countries released the PMI data. The reading was weak, but came in better-than-expected. In this context, LME nickel prices continued to fluctuate during European and US trading hours, with no dramatic changes. Finally, LME nickel prices ended at USD 16,730/mt, down USD 63/mt from a day earlier.

LME base metals market overnight largely closed lower, since investors worried the global economic growth and whether or not the agreement reached in the EU summit can be ultimately implemented. The US ISM manufacturing data for June was 49.7, lower than the 52.0 estimation, and also down from 53.5 in May. This is the first time for the reading below 50 since July 2009. The slackened manufacturing data was due largely to sharp declines in demand, adding to market worries over the economic recovery in the country. The final euro-zone manufacturing PMI stood at 45.1 in June. In other news, Finland and the Netherlands are opposed to a permanent rescue fund ESM in buying bonds on the secondary market due to high risks. The possibility that the euro zone rescue funds buy bonds in order to stabilize markets, agreed in the two-day EU summit. Market risk appetite will grow once the EU implements relevant measures. 

As markets have gradually absorbed positive news from the EU summit, LME nickel prices will hardly surge again. The US stocks market will be closed Wednesday for the Independent Day holiday. LME nickel markets are expected to hover between USD 16,500-17,000/mt. Domestic spot nickel prices will move in the RMB 120,000-122,500/mt range on Tuesday.