SHANGHAI, Oct. 15 (SMM) --
LME Nickel Price Trends
1. Last week’s US initial jobless claim totaled 339,000, better than the 370,000 expected and well below last week’s 367,000. This and other positive economic data from the US will lend support for riskier assets.
2. Progress was reported in negotiations between Greece and IMF, World Bank and EU, with a consensus plan on Greece austerity measures possible before the EU summit next week. If Greece successfully adopts the financial aid plans, LME nickel prices may gain additional upward momentum.
3. Spain also is now more willing to accept aid from the IMF, which will help keep markets stable.
1. Sluggish downstream demand is still weighing down LME nickel prices. In late September, although stainless steel inventories in Wuxi fell 5.91% MoM to 176,620 mt, inventories were still high near 180,000 mt. Post-holiday stock replenishments of refined nickel, were below previous years’ levels.
2. Due to the lack of solid economic news, LME nickel prices will lack strong upward momentum and will meet strong resistance at USD 18,000/mt. Shorts may enter markets as LME nickel prices advance to USD 18,000/mt, which will also limit further gains.
Generally speaking, market sentiment is bearish now that any positive impact from QE3 has been absorbed and since ongoing Greek and Spanish debt issues continue to dampen market sentiment. These two countries are not expected to report any significant progress in the coming week, but any positive news may ease market concerns. In the coming week, SMM expects LME nickel prices will move in the USD 17,500-18,000/mt range in the following week.
In China’s nickel spot markets, prices for stainless steel have been steadily rising, so inventories, especially #300 stainless steel, have begun falling. SMM expects spot nickel prices will remain firm as downstream demand may improve in the coming week.