SMM Nickel Market Morning Review (2013-4-8)

SHANGHAI, Apr. 8 (SMM) – LME nickel price opened at USD 16,075/mt last Sunday, with the high end of the price range USD 16,245/mt, and finding support at USD 15,968/mt. Finally, LME nickel prices closed at USD 16,040/mt, down USD 82/mt. Trading volumes decreased by 1,326 lots, to 2,404 lots, and total position increased by 2,652 lots, to 116,895 lots. Inventories fell by 678 mt, to 166,038 mt.

Bank of Japan pushed radical monetary policies last Thursday, lifting the market briefly. But market concerns dominated the market again, pulling down nickel prices to lose previous gains. The number of US March employment data increased by 88,000, the lowest since June 2012, and fell short of half the 200,000 expected. But US March unemployment rate slid from 7.7% in February, to 7.6%, the lowest since December 2008. Given negative market situations, LME nickel prices hit a record low of USD 15,968/mt last Friday since November last year, and finally closed at USD 16,040/mt, down USD 82/mt.

US employment data was a focus of markets during the Qingming holiday in China. US Market employment increased by 158,000, much lower than the forecast of 197,000, and the number of non-farm employment only increased by 88,000, falling short of the 190,000 expected, and hitting a 9-month low. US unemployment rate fell from 7.7%, to 7.6%, but that is due mainly to decreasing employment rate, showing more people stopped looking for jobs. With growing uncertainty towards US economic recovery, European and US stocks and commodities fell across the board.

The Reserve Bank of Australia, Bank of UK and European central bank all maintained monetary policies unchanged. But Bank of Japan announced massive easing policies including expanding government bonds purchasing, prolonging deadlines for Japanese government bonds, increasing risk assets purchasing and advancing open assets purchase plan, and this caused JPY against the US dollar to plunge by 3.52% during the week.

LME nickel prices will move between USD 15,900-16,400/mt today. Spot nickel prices are expected between RMB 111,000-113,000/mt.