SHANHAI, Oct. 22 (SMM) --

LME Nickel Price Trends

Positive Factors:

1. According to Germany media, Germany and France reached an informal agreement to provide EUR 31.5 billion in financial aid to Greece before the end of November. The Greek government reported that negotiations with the EU, ECB and IFM made significant progress, while the EU also expressed satisfaction with the Greek government’s efforts to reduce deficits.

2. The US Department of Labor announced last Thursday that initial jobless claims were 388,000, higher than the 363,000 markets expected and up from the previous week’s 339,000.However, other economic data from the US was positive, with the Philadelphia Fed manufacturing index for October of 5.7, significantly above expectations.

3. China’s industrial value-added output for September was 9.2%, both above the expected 9.0 and last month’s reading of 8.9. Annualized retail sales for September were 14.2%, also better than the expected 13.2%. This relatively strong industrial and retail sales data boosted sentiment, and many analysts now believe China’s economic slump may have hit bottom in August. Following release of this data, the Shanghai Composite Index advanced.

Negative Factors:

1. Google’s earnings report showed Q3 profits down 20%, pushing down shares 11% and dragging down the entire US tech sector. Earnings reports from other major companies will be released over the next week and market expectations are not optimistic.

2. The EU will convene a two-day summit in the coming week, but no significant news is expected to be announced. Spain is not expected to request financial aid for the foreseeable future, which will dampen market sentiment.

In general, however, market sentiment was relatively optimistic and rising stock prices in major economies helped push up LME nickel prices at the end of last week. LME nickel prices, however, were still on downward track and were not expected to make any significant gains in the short term. LME nickel prices may experience corrections after previous sharp declines, but meet resistance at USD 17,500-17,600/mt. If the euro zone fails to report significant progress, LME nickel prices will continue to hover without any clear trend.

Domestic Markets

In China’s domestic markets, downstream consumers’ wait-and-see sentiment was growing following the recent LME nickel price slump. Traders also lacked arbitrage opportunities, so transactions were sluggish. However, transactions should improve along with LME nickel prices increase, but will still be considered lackluster in the coming week.