SHANGHAI, Mar.14 (SMM) -- LME nickel for delivery in three months opened at USD 17,000/mt and closed at USD 16,970/mt on Wednesday, down USD 33/mt from a day earlier, with the intraday high at USD 17,167/mt and the lowest price at USD 16,935/mt. Daily trading volumes were 2,294 lots, down 1,307 lots. Positions were 117,720 lots, up 1,942 lots. LME nickel inventories were 161,046 mt, down 270 mt.

LME nickel prices shrugged off negative impact from decline in China’s stock markets and advanced to hit a high at USD 17,167/mt during the Asian trading hours. However, LME nickel prices fell and closed USD 33/mt lower at USD 16,970/mt during the European and US trading hours as the US dollar index exceeded 83 mark on better-than-expected retail sales.

The monthly rate of US retail sales for February was 1.1%, higher than 0.5% expected, rising for the fourth consecutive months, and the highest since September 2012, showing that the US economy is under recovery. This fueled the expectation that the Fed may tighten liquidity in advance, pushing up the US dollar and weighing down base metal prices. In addition, the US business inventory for January rose 1.0% MoM, and government deficit for February was USD 203.54 billion, lower than USD 205 expected. However, the picture is totally different in the euro zone. Industrial output for January fell by 0.4% in the euro zone, lower than 0.1% expected. In addition, yielding rate of Italy’s medium and long-term government bond rose, showing that investors’ concern over political stability in Italy grew. The weak economic momentum, unstable political condition and strong US dollar index weighed down the euro by 0.58%.

In China, Zhou Xiaochuan, President of the People’s Bank of China, expressed that to stable commodity price is central bank’s top priority in 2013. Meanwhile, growth for M2 was set at 13%, which means that monetary supply will be tighter than the previous two years.

SMM expects that LME nickel prices will move between USD 16,800-17,200/mt and Shanghai nickel spot prices will move between RMB 117,000-119,000/mt on Thursday.