SMM Nickel Market Morning Review (2013-3-19)

SHANGHAI, Mar.19 (SMM) -- LME nickel for delivery in three months opened at USD 16,867/mt and closed at USD 16,628/mt on Monday, down USD 312/mt from a day earlier, with the intraday high at USD 16,867/mt and the lowest price at USD 16,525/mt. Daily trading volumes were 5,255 lots, up 1,429 lots. Positions were 115,135 lots, up 117 lots. LME nickel inventories were 162,307 mt, up 762 mt.

Market shock on Cyprus concern sent the US dollar higher but weighed down the euro. LME nickel prices slumped after opening and finally closed at USD 16,628/mt, down USD 312/mt from a day earlier.

In order to reduce losses for common people, Cyprus' government is reportedly proposing to skew the raid on bank deposits towards larger accounts, with one idea being to tax savings of under €100,000 at 3% instead of 6.7%, as initially planned. Deposits of between €100,000-50,000 would be levied at 10% instead of 9.9%, and deposits of over €50,000 would be levied at 15%. The proposal will be voted on Tuesday, and the result will affect market movement. The European equity market slumped and risk aversion fund flew into Germany’s government bond, lowering the yield rate of Germany’s 10-year government bond to by 6 basis points to 1.4%. However, borrowing costs of other countries rose, and the Greek 10-year government bond yielding rate surged by 50 basis points to 11.31%.

In China, housing prices still rose on February. 66 out of 70 cities in China reported housing price increase, and only 53 cities reported price hike in the previous month. Average housing price rose by 1.0% MoM and up 1.75% YoY. Beijing issued detailed rules for housing regulation.

SMM expects that LME nickel prices will unlikely to tumble and will largely move between USD 16,450-16,750/mt and Shanghai spot prices will move between RMB 114,500-116,500/mt on Tuesday.