SHANGHAI, Jan. 22 (SMM) – In the Shanghai nickel spot market, mainstream traded prices of nickel from Jinchuan Group were between RMB 124,000-124,200/mt, and mainstream traded prices of nickel from Russia were between RMB 123,000-123,200/mt. Demand improved, and inquiries increased. Transactions of Jinchuan nickel were largely around RMB 124,000/mt. During the afternoon trading hours, suppliers hiked offers but transactions turned quiet.
Based on SMM result on market sentiment, 40% market players believe that LME nickel prices may advance and break through USD 17,700/mt in the coming week. Annualized growth of China’s 4Q GDP was 7.9%, slightly better than the forecasted 7.8% and up from 3Q’s 7.4%. In addition, China’s annualized retail sales and industrial output for December were both better than expectations. Besides, new housing starts in the US during December rose by 12.1% compared to November, the largest gain since July 2008. In addition, initial jobless claims were only 335,000, better than the 369,000 expected and down from the previous reading of 372,000, and the largest decline in four years. In addition, 4Q earnings reports from Citigroup, JPMorgan, Goldman Sachs and other financial giants were better than markets expected, helping boost markets, despite the 63% drop in profits at Bank of America. Finally, stainless steel inventories in Wuxi fell by 3.68% from late December to 181,546 mt in early January. Inventories of #300 stainless steel, major consumer of nickel, fell 4.72% to 131,245 mt. The drop in stainless steel inventories indicated that demand improved.
40% market players believe that LME nickel prices believes that LME nickel prices will fluctuate between USD 17,350-17,600/mt. Considering the lack of solid news and no clear technical trend, SMM expects that LME nickel prices will consolidate around existing level.
The remaining 20% market players hold that LME nickel prices will fall between USD 17,150-17,300/mt. LME nickel inventories surged after the New Year holiday, from 139,908 mt on December 31st to 147,342 mt January 17th, a gain of over 5%. Inventory pressure may now prevent LME nickel prices from rising further. In addition, the University of Michigan consumer confidence index and the Philadelphia Fed manufacturing index for January were both lower than market expectation.