SHANGHAI, Oct. 9 (SMM) -- Jinchuan Group raised ex-works nickel prices by RMB 2,000/mt to RMB 133,000/mt on October 2nd, but the price hike failed to boost prices in Shanghai spot nickel market. During the morning trading hours of the first post-holiday trading day, mainstream traded prices of nickel from Jinchuan Group were between RMB 131,400-131,700/mt and mainstream traded prices of nickel from Russia were between RMB 129,800-130,200/mt. During the afternoon trading hours, affected by LME nickel price decline, mainstream traded prices of nickel from Jinchuan Group were between RMB 131,300-131,700/mt and mainstream traded prices of nickel from Russia were between RMB 129,600-130,000/mt. Transactions were still relatively quiet.
Based on result of an SMM survey on market outlook, 60% market players believe that LME nickel prices will continue to stabilize between USD 18,100-18,500/mt. The major factor capping LME nickel price increase is the European debt crisis. Greek Prime Minister Antonis Samaras said that the country’s cash will run out in November if it fails to receive financial bailout. However, the IMF president reported progress over negotiation with Greece and Germany’s Chancellor Angela Merkel will visit Greece on Tuesday to have discussion with Greek Prime Minister Antonis Samaras on economic reform and deficit cut, which fueled positive market expectation over the Greek debt crisis. With regard to Spain, although the Spanish government announced austerity plan, but public was not satisfied with the plan. The eruption of large-scale protests added uncertainties over the Spanish debt crisis. These market players believe that LME nickel prices shall not make significant breakthrough if no significant progress is made in the Greek and Spanish debt crisis.
30% market players believes that LME nickel prices shall fall below USD 18,000/mt and will find support at USD 17,700/mt in the coming week. The US nonfarm employment data announced last Friday revealed that the US unemployment data fell to 7.8%, far lower than market expectation of 8.2%, the lowest since January 2009. These market players believe that the improved unemployment data may lower possibility of possible stimulus policy. Therefore, the US dollar index was boosted up. Technically speaking, KDJ index of LME nickel already suggested downward trend.
The remaining 10% market players were still positive towards LME nickel price outlook, and believe that LME nickel prices shall surge to USD 18,500-18,900/mt. The US dollar index meets resistance at 80 mark, and lacks momentum to advance further. In addition, the Shanghai Composite Index posted strong performance after the National day holiday and even surged to 2096.26. Furthermore, possible stimulus policy from the 18th Communist Party Congress may help improve market sentiment in October. Therefore, LME nickel prices are quiet likely to advance in the coming week.