SHANGHAI, Jul. 19 (SMM) – LME nickel prices overnight opened at USD 16,150/mt, with the high end USD 16,170/mt, finding support at USD 15,960/mt. Finally, LME nickel prices closed at USD 16,077/mt, down USD 14/mt. Trading volumes decreased by 463 lots to 1,743 lots, and total position was 106,193 lots, down 3,117 lots. LME nickel inventories were 109,326 mt, up 2,328 mt.
German government bond yields overnight were negative, showing strong risk aversion sentiment of euro zone investors. As a result, LME nickel prices once dipped to USD 15,960/mt. Intel stocks rose 3%, while IBM stocks also rose by 2%, and the Dow Jones Industrial Average, Nasdaq Composite Index and Standard and Poor's Composite Index moved higher. LME nickel prices gained back previous losses and finally closed at USD 16,077/mt.
LME base metals prices fell but rose later in the day. US Federal Reserve President Bernanke did not mention QE3 implementation in the congress monetary policy report, but was pessimistic toward economic outlook. The Fed does not think recent economic data was poor enough to push QE3, depressing the market. But the market was still expecting the Fed will release the plan in future. Market risk appetite did not deteriorate due to the lack of negative news. The annual rate of US housing starts during June was the highest since October 2008, while single-family housing starts were the highest since April 2010.
LME nickel prices should move between USD 15,900-16,400/mt today, and domestic spot nickel prices should move between RMB 116,500-119,000/mt.