SHANGHAI, Apr. 15 (SMM) – LME nickel price last Friday opened at USD 16,250/mt, with the high end of the price range USD 16,250/mt, and finding support at USD 15,835/mt. Finally, LME nickel prices closed at USD 15,856/mt, down USD 364/mt. Trading volumes increased by 1,282 lots, to 4,023 lots, and total positions increased by 950 lots, to 120,846 lots. Inventories grew by 1,008 mt, to 169,356 mt.
Asian stocks mostly closed the day with declines due to a lack of positive news, and LME nickel prices fluctuated narrowly between USD 16,150-16,230/mt. But during European and US trading hours, base metals prices dropped across the board, with decreases in excess of 2%. Despite disappointing US economic data, there was rarely significantly negative news in the market. LME nickel prices were dragged down by falling gold and silver prices, and finally closed at USD 15,856/mt, down USD 364/mt.
Due to falling gasoline sales, US March retail sales were USD 418.28 billion, down 0.4% from the previous month, but sales in restaurants, online stores and furniture stores increased. University of Michigan April CCI plummeted by 6.3 in March, to 72.3, the lowest last seen in July 2012. That is because of the sluggish job market in March, and uncertainties of US fiscal policies. The data maker pointed out that 32% people surveyed believe US unemployment rate will rise at the end of the year, up from current levels, while only 24% think the unemployment rate will fall noticeably. With regard to current US fiscal policies, only 9% believe they are satisfactory. Besides, US March PPI was -0.6%, also falling short of expectations and the previous month.
Euro zone finance minister meeting made great strides including successfully prolonging the deadline for Ireland and Portugal to pay their debt, an agreement on the banking sector union issue and a confirmation that Cyprus will receive bailout funds, pushing up the euro to 1.31. But the market barely gave any positive response to the news. On top of Cyprus selling gold assets, international spot gold prices plunged by nearly 5% last Friday, dipping to as low as USD 1,481/oz, with a weekly decline of 6%, the largest last seen in December 2,011. Falling commodity markets also caused Brent crude oil prices to plunge to a nine-month low of USD 101/bbl. The CFTC reported that net longs of the US dollar decreased by 4,766 lots, showing speculator optimism towards the US dollar weakened.
The central parity of the RMB against the US dollar was 6.2506 on April 12th, up 91 basis points from the previous trading day, and hitting a record high last seen on April 10th and since the foreign exchange reform in 2005, reflecting overseas capital is surging into China. According to latest data from the People's Bank, China's foreign exchange reserves increased by nearly USD 130 billion in Q1, a record quarterly high since Q2 2011, and forex receipt in financial institutions in February increased by RMB 295.43 billion. The State Council executive meeting decided to implement pilot projects of levying value added tax instead of business tax in the transportation industry and modern service industry across China, and will include railway transportation and post and telecommunication industries in the pilot projects soon.
LME nickel prices will move weakly between USD 15,600-15,900/mt today. Spot nickel prices in Shanghai are expected between RMB 111,500-113,500/mt.