SHANGHAI, Feb.21 (SMM) -- LME nickel for delivery in three months opened at USD 17,445/mt and closed at USD 17,057/mt on Wednesday, down USD 392/mt from a day earlier, with the intraday high at USD 17,540 mt and the lowest price at USD 16,970/mt. Daily trading volumes were 6,358 lots, up 540 lots. Positions were 116,856 lots, down 1,167 lots. LME nickel inventories were 153,306 mt, down 78 mt.
Asian stock markets largely advanced during the Asian trading hours, sending base metal prices slightly higher, excluding nickel and tin. Nonetheless, nickel prices still received support at USD 17,233/mt. During the European and US trading hours, minutes from the Federal Reserve suggested that the U.S. central bank could slow or halt its bond-purchasing programs before hiring is healed. On hearing the news, LME nickel prices fell all the way to fall below USD 17,000/mt and close at USD 17,057/mt, down USD 392/mt from a day earlier.
The Fed release January’s interest rate meeting minutes on Thursday, which hinted that policymakers remain divided on the timing and amount of bond purchases, with some members saying that the bond buying program may need to end before jobless rate falls below 6.5 percent.
In China, China’s premier Wen Jiabao presided a meeting, which emphasized continuous efforts to curb real estate market, including control on speculative purchasing and expanding property tax reform range.
Meeting minutes from central bank in the UK supported loose monetary policy.
In the macroeconomic data front, the US new housing start for January was 890,000, lower than market expectation and previous reading. Housing permit recorded 925,000, exceeding four years’ high. The PPI for January rose by 0.2%, rising for the fourth consecutive month. The consumer confidence index for February was -23.6 in the euro zone, while market expectation was -23.1.
The eurozone February manufacturing PMI and service PMI may be released today, which will affect base metal price performance. The US dollar index exceeded 81 points overnight, exerting huge downward pressure on base metal prices. SMM thus expects LME nickel prices may fall to test USD 17,000/mt. In the Shanghai nickel spot market, dip buying may emerge, and offers may be between RMB 120,000-123,000/mt on Thursday.