SMM Nickel Market Morning Review (2013-3-15)

SHANGHAI, Mar. 15 (SMM) -- LME nickel LME nickel for delivery in three months opened at USD 16,997/mt and settled at USD 17,191/mt overnight, up by USD 221/mt from a day earlier, with the intraday high at USD 17,244 mt and the low at USD 16,881/mt. Daily trading volumes were 3,092 lots, up 798 lots. Positions were 115,804 lots, down 1,916 lots. LME nickel inventories were 161,646 mt, up 600 mt.

The US dollar index hit a high at 83 following the news that US retail sales data advanced for the fourth consecutive month, weighing down LME nickel prices to hit a low at US 16,881/mt during the early Asian trading hours. However, as longs power erupted at the tail of the Asian trading hours, LME nickel prices inched up to close at USD 17,191/mt, up USD 221/mt from a day earlier.

Upbeat economic data boosted the US equity market overnight. The monthly rate of retail sales data for February was 1.1%, far higher than 0.5% expected, rising for the fourth consecutive month and the highest since September 2012, evidencing that the US economy is under recovery. The adjusted seasonally rate of PPI for September rose by 0.7%, beating down market expectation.

The euro zone, however, presented a totally different picture. The payrolls in the Q4 2012 fell to the lowest in seven years, suggesting the financial crisis in the euro zone gave a heavy blow on economic development in the euro zone and also pressuring leaders' austerity measure.

The new president of Japan’s central bank will support for ultra-loose monetary policy. According to report, last week’s capital flowing to Japans stock market hit USD 10.5 billion, the largest since 1982, which pushed the Nikkei index up 1.2%. In China, the Minister of Housing and Urban-Rural Development said that a new round of housing regulation will be strictly implemented and China’s housing prices will definitely fell.

The US dollar fell after hitting a 7-month high at 83.166 overnight. The US stock market rallied, with the Dow Jones Industrial Average rising for the 10th consecutive month. Asian stock market largely advanced, and most LME base metal prices closed with gains.

Technically speaking, LME nickel pries are still on rebound trend. SMM expects that LME nickel prices will move between USD 16,900-17,300/mt and Shanghai nickel spot prices will move between RMB 118,000-120,000/mt on Friday.