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SMM Nickel Market Morning Review (2013-3-11)
Mar 11,2013 09:49CST
price review forecast
SMM expects LME nickel price will move between USD 16,550-16,900/mt and Shanghai nickel spot prices will move between RMB 117,000-119,000/mt on Monday.

SHANGHAI, Mar.11 (SMM) -- LME nickel LME nickel for delivery in three months opened at USD 16,650/mt and settled at USD 16,720/mt overnight, up by USD 110/mt from a day earlier, with the intraday high at USD 16,750 mt and the low at USD 16,511/mt. Daily trading volumes were 2,484 lots, up 371 lots. Positions were 115,334 lots, down 409 lots. LME nickel inventories were 160,938 mt, down 24 mt.

China trade surplus for February was USD 15.25 billion, far higher than USD 6.9 billion expected. In addition, China’s exports for February were up 21.8% YoY, also higher than market expectation. Despite positive economic data from China, LME nickel prices still fluctuated narrowly around 10-moving average and moved around USD 16,650/mt. During the European trading hours, the US non-farm employment payrolls were strong, boosting LME nickel prices to close at USD 16,720/mt, up USD 110/mt from a day earlier.

The US announced better-than-expected nonfarm employment data last Friday. The US non-farm employment payrolls for February were 236,000, bring the unemployment rate to 7.7%, the lowest since late 2008. The data lent momentum for US economic recovery and fueled expectation that the Fed may quit QE. This pushed the US dollar higher and weighed down the base metal prices.

In the euro zone, uncertainties over the Italian parliamentary election grew, and the Fitch cut Italian credit rating to BBB+, weighing down the euro. In addition, Mexico announced last Friday to cut interest rate by 50 basis points to 4%, a historical low and the first time for interest rate cut since July 2009.

In China, residents in Hong Kong, Macao and Taiwan are able to do transactions in China’s stock market, which will increase liquidity in China's stock market. Besides, China began to formulate detailed rules for property regulation.

Meanwhile, Canada’s unemployment data for February was lower than market expectation at 7.0%, and the employment payrolls increased sharply by 50,700 in February. Germany’s industrial output annualized at 1.3%, below market expectation.   At the weekend, China’s trade surplus for February was announced at USD 15.3 billion. Affected by holiday factor, China’s CPI for February was 3.2% YoY, the highest in 10 months, and PPI was down 1.6% YoY. The new loans for February were RMB 620 billion, down RMB 90.7 billion YoY.

Despite mixed news in the market, technical indicators suggest that China’s LME nickel prices are on upward track. SMM expects LME nickel price will move between USD 16,550-16,900/mt and Shanghai nickel spot prices will move between RMB 117,000-119,000/mt on Monday.

LME nickel price
Shanghai nickel spot price

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