SMM Nickel Market Morning Review (2013-1-29)

SHANGHAI, Jan. 29 (SMM) -- LME nickel for delivery in three months opened at USD 17,342/mt and closed at USD 17,575/mt, up by USD 207/mt from a day earlier, with the intraday high at USD 17,635/mt and the low at USD 17,342/mt, up USD 207/mt from a day earlier. Daily trading volumes were 2,836 lots, up 120 lots. Positions were 109,802 lots, down 218 lots. LME nickel inventories were 149,424 mt, down 792 mt.

According to NBS, China’s industrial profits for December 2012 totaled RMB 895.2 billion, up 17.3% YoY, which boosted China’s stock market up by 2.5%. However, the rally in Stock market failed to boost LME nickel prices. During the Asian trading hours, LME nickel prices fluctuated narrowly around USD 17,342/mt. During the European and US trading hours, the US announced mixed economic data, with durable goods orders better than market expectation and pending housing sales below market expectation. LME nickel prices finally closed at USD 17,575/mt, up USD 207/mt from a day earlier.

The Fitch said that the extending of US debt ceiling eased risk of US AAA credit rating in the short term, but may adjust credit outlook from negative into stable due to US deficit cutting plan. Fitch later expects that the US economic growth may be 2.8% in 2014.Shinzo Abe, Japan's prime minister said at his first policy speech that Japan would set the economy boost as the priority in 2013, and expected that Japan's economic growth would be 2.5% in 2013. 

The US Department of Commerce revealed that durable goods orders for December were higher than market expectation. It was reported that the US durable goods for December rose by 4.6%, higher than 1.0% expected and initial reading of 0.8%. However, the US pending housing sales for December was 6.9%, far below 12.5% expected and previous reading of 9.8%.

LME base metal performance was mixed, the euro and US dollar index both fluctuated narrowly. The US stock markets were mixed, while China's Shanghai Composite Index rose by 2.41% to hit 8 month high.

LME nickel inventories fell, relieving resistance of LME nickel prices. SMM expects that LME nickel prices may present robust performance and will move between USD 17,400-17,700/mt. In China’s spot nickel market, prices will be firm between RMB 123,000-124,500/mt on Tuesday.