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SMM Nickel Market Morning Review (2013-3-27)
Mar 27,2013 10:15CST
price review forecast
LME nickel prices started at USD 16,987/mt overnight and ended USD 155/mt lower at USD 16,805/mt.

SHANGHAI, Mar. 27 (SMM) – LME nickel prices started at USD 16,987/mt overnight and ended USD 155/mt lower at USD 16,805/mt, with highest price at USD 17,134/mt and lowest at USD 16,774/mt. Traded volumes were up 389 lots to 2,440 lots, while positions were up 1,259 lots to 113,759 lots. LME nickel inventories increased 474 mt to 162,498 mt.

LME nickel prices fell to USD 16,900/mt after opening overnight influenced by the decline in Chinese stock markets, but attempted to break USD 17,000/mt with Asian stock markets closed. During European trading hours, the mixed US economic data and concerns over lingering influence of the bailout deal for Cyprus drove LME nickel prices to close lower at USD 16,805/mt.

The US new homes sales were reported at 411,000 mt at an annualized rate in February, lower than 422,000 expected and the previous figure was revised downward from 437,000 to 431,000. The Conference Board Consumer Confidence Index was 59.7 in March, worse than expectations and January’s level. The ICSC-Goldman Sachs report showed that retail sales was down 1.7% as of the week ended March 23, compared with the 1.4% increase recorded for the previous week, reflecting that the US sales failed to boost the country’s economy recently. However, the US February durable goods orders rose 5.7%, exceeding the 3.8% increase expected, and the decline in January was revised from 4.9% to 3.8%. Thus, the US dollar index edged down to 82.8.

The euro drifted down on Monday as the President of the European Group said the bailout deal for Cyprus will be a model for dealing with future banking crisis. He reversed his comment later, noting that the case in Cyprus was an exception. Besides, Italy sold EUR 8.5 billion at the bond sales held on Tuesday, with bond yields down to the lowest level since January, but market showed mild response.

In China, the spot exchange rate of RMB against the USD broke through RMB 6.21 for the first in 19 years due mainly to the satisfactory exports this year. However, as the US dollar remained strong, the room for RMB appreciation was limited. Meanwhile, data from the Ministry of Commerce showed that China’s February FDI grew 6.32% YoY, which was the first increase in nine months. Of these, investment from the EU climbed rapidly, while that from the US and Japan was down 5.37% and 6.7%. This may be a reflection of expectations for the new leadership in China.

On March 27, spot nickel prices in China are expected to be RMB 116,500-118,000/mt, with transactions down.



LME nickel prices
spot nickel price

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