SHANGHAI, Feb.22 (SMM) -- LME nickel for delivery in three months opened at USD 17,000/mt and closed at USD 16,750/mt on Wednesday, down USD 307/mt from a day earlier, with the intraday high at USD 17,037 mt and the lowest price at USD 16,600/mt. Daily trading volumes were 7,200 lots, up 842 lots. Positions were 116,855 lots, down 1 lot. LME nickel inventories were 154,398 mt, up 1,092 mt.
No solid news was announced during the Asian trading hours. As negative impact from the Fed meeting minutes exacerbated later, Asian stock markets plunged, with the Shanghai Composite Index falling by over 3%, the largest decline in 15 months, and the Nikkei Index down 1.39%. Pessimistic sentiment quickly weighed down LME nickel prices.
Economic data announced during the European and US trading hours were not positive. The US last week’s initial jobless claim surged by 21,000 to 362,000. The Philadelphia Fed manufacturing index for February deteriorated from -5.8 to -12.5. Coupled with Fed officials’ suggestion to reduce assets purchase, pessimistic sentiment dominated market. Finally, LME nickel prices closed at USD 16,750/mt, down USD 307/mt from a day earlier.
February’s PMI from the euro zone and Germany fell below market expectation. The euro zone initial composite PMI declined for the third consecutive month to 47.3. Initial composite PMI from Germany was 52.7, the lowest in two months, and initial composite PMI from France was only 42.3, the lowest in 47 months. Negative data renewed market concern over economic recovery, weighing down the euro versus the US dollar below 1.32.
The US Philadelphia Fed manufacturing for February was far below market expectation and hit an eight month low at -12.5. The initial manufacturing PMI for February was 55.2, below 55.5 expected and previous reading of 55.8. Last week’s initial jobless claim was 362,000, higher than 355,000 expected and reversing the declining trend in the previous two weeks. The growth in initial jobless claim reflected bumpy road of the US employment market. Affected by negative economic data from the US, the US stock market continued to fall overnight.
In China, the executive meetings of the State Council released five measures to tame real estate market, showing government’s strengthened efforts on curbing real estate market. This triggered decline in real estate stocks, dragging down the Shanghai Composite Index to record the largest decline in 15 months.
Germany will announce GDP for 4Q today. If the data are positive, market confidence may be boosted. However, the concern over changes in QE and possible spending cut will continue to weigh on nickel prices. In spot market, dip buying may increase after LME nickel prices falling for the fourth consecutive month, but spot nickel prices will remain between RMB 115,000-118,000/mt on Friday.