SHANGHAI, Feb. 25 (SMM) -- LME nickel LME nickel for delivery in three months opened at USD 16,775/mt and settled at USD 16,947/mt overnight, up USD 197/mt from a day earlier, with the intraday high at USD 17,050/mt and the low at USD 16,620/mt. Daily trading volumes were 5,888 lots, down 1,312 lots. Positions were 119,129 lots, up 2,274 lots. LME nickel inventories were 154,500 mt, up 102 mt.

During Friday’s Asian trading hours, LME nickel prices rebounded above USD 17,000/mt after excessive plunge, but fell rapidly later due to lack of positive impetus. During the European trading hours, the final GDP for 4Q from Germany failed to improve, dampening market confidence and weighing on LME nickel prices to pare early gains. Later, Germany’s February IFO business sentiment index improved beyond market expectation, but forecast for 2013 economic growth in the euro zone was cut from 0.1% to negative 0.3%. The mixed economic data confined LME nickel prices to narrow band. Finally, LME nickel prices closed at USD 16,947/mt, up USD 197/mt from a day earlier.

Although economic data from Germany are positive, risk events in the euro zone are accelerating. Germany’s IFO business sentiment index rose to 107.4, a 10-month high and beyond 104.9 expected, but still failing to boost the euro, as positive impact was offset by the following negative events. First, the European Commission cut the 2013 euro zone economic forecast from 0.1% to negative 0.3%. Second, repayment of the second LTRO was only 50% of expected. Third, the Moody’s cut credit rating of UK government bond from Aaa to Aal, which is the first time for UK to lose the highest credit rating, weighing on the euro versus the US dollar.

LME nickel prices temporarily stabilized around USD 17,000/mt. Close attention should be paid to Italian presidential election, the US revised GDP for 4Q, durable goods orders and ISM manufacturing index. Besides, HSBC's China PMI for February should also be watched. If economic data are positive, market may be boosted. SMM expects that spot nickel prices will move between RMB 118,000-120,500/mt on Monday.