SHANGHAI, Jul. 10 (SMM)-LME nickel market overnight opened at USD 16,280/mt, with the highest and lowest level of USD 16,420/mt and USD 16,235/mt, respectively. Finally, LME nickel market closed at USD 16,370/mt, up USD 110/mt from a day earlier. Transactions for the day were 1,878 lots, down 1,704 lots. Positions were 109,577 lots, up 382 lots. Inventories were 105,060 mt, up 1,206 mt.
China announced July 9th the June CPI eased to 2.2%, helping support base metals prices. Later, the yield of Spain’s 10-year bond climbing above 7% generated market worries, but market optimism over more incentive measures and profit-taking by the shorts sent nickel prices higher. Finally, LME nickel prices ended at USD 16,370/mt, down USD 110/mt from a day earlier.
LME base metals overnight stabilized due to market expectations on the introduction of stimulus plans by the Euro zone and China. Market players expected more details on the measures proposed at June’s EU summit to be discussed at the meeting of Eurozone finance ministers. The meeting will further discuss the anti-crisis measures put forward at the EU summit, and should mainly focus on banking regulation, the utilization of Eurozone bailout funds, aids to Spain and Cyprus and whether to make any concession on Greek issue. However, some experts believe the final decision on these matters should take months, while policymakers will be under increasing pressures. Given the depressed market sentiment, investors placed high hopes on the meeting. China’s June CPI rose 2.2% according to the data released on July 9, showing the slowest growth in 29 months, while the PPI was down 2.1% YoY, presenting downtrend for four months. It is expected China may further lower interest rate in 2H 2012, and will likely cut the reserve requirement ratio in July.
The news from the Eurozone finance ministers’ meeting has been reported that approximately 30 billion euros will be offered to Spain in late July. The news may boost the market, but any rising room for LME nickel prices will be limited due to the strong resistance at the USD 16,550/mt mark. SMM expects LME nickel prices to move between USD 16,100-16,600/mt, and mainstream traded prices in domestic nickel spot market will be between RMB 119,300-122,000/mt on Tuesday.