SMM Nickel Market Morning Review (2013-1-8)

SHANGHAI, Jan. 8 (SMM) –LME nickel for delivery in three months opened at USD 17,450/mt and closed at USD 17,313/mt, down USD 138/mt from a day earlier, with intraday high at USD 17,510/mt and the low at USD 17,200/mt.Daily trading volumes were 2,110 lots, down 1,161 lots. Positions were 117,597 lots, down 262 lots. LME nickel inventories were 142,248 mt, up 576 mt from a day earlier.

LME base metal prices largely fluctuated in narrow band due to absence of solid news during the Asian trading hours. During the afternoon trading hours, the Dow Jones Index, Standard & Poor Index and Nasdaq Composite Index fell by 0.150%, 0.137%, and 0.138% respectively, weighing down LME nickel prices fell below 5-day and 10-day moving average. During the European trading hours, LME nickel prices even hit a low at USD 17,300/mt. Due to absence of clear guidance and since the euro zone Sentix invetor confidence index for January and PPI for November were both weak, LME nickel prices extended weak momentum and closed at USD 17,313/mt, down USD 138/mt from a day earlier.

On the macroeconomic front, the US will not release significant economic data on Tuesday. According to Janet Yellen, vice-chairman of the the Federal Reserve Board, the US monetary policy tool may be adjusted. According to data from euro zone, PPI for November fell 0.2% MoM, while previous expectation was down 0.1%, which was dragged down by energy price. Japan’s monetary base annual rate was up 11.8% in December, higher than 5.0% in November. After seasonal adjustment, Japan’s monetary base monthly rate surged by 39% in December, but fell by 13.3% in November.

China’s Commerce Department released that sales of home appliances in rural areas hit 80 million units, and sales revenue totaled RMB 214.5 billion, up 22.6% YoY and up 18.8% YoY respectively. With regard to new loans, China’s new loans for November are expected of RMB 550 billion, and the highest volume for the year was RMB 650 billion, and the new loans for November was RMB 522.9 billion. The recently-held central economic work conference emphasized that loans scale should be expanded in 2013.
The Fed officials remarket indicated that Fed may halt to purchase assets, which will weigh on base metal prices. In addition, LME nickel prices surged and hit a new year for 2013.Therefore, SMM expects that LME nickel prices will move between USD 17,200-17,600/mt and Shanghai nickel spot prices will move between RMB 120,000-122,000/mt on Tuesday.