SHANGHAI, Apr. 16 (SMM) – LME nickel price overnight opened at USD 15,850/mt, with the high end of the price range USD 15,879/mt, and finding support at USD 15,396/mt. Finally, LME nickel prices closed at USD 15,720/mt, down USD 136/mt. Trading volumes increased by 2,588 lots, to 6,611 lots, and total positions increased by 56 lots, to 120,902 lots. Inventories fell by 624 mt, to 168,762 mt.
LME nickel prices dropped immediately following opening. China's GDP in Q1 grew by 7.7% YoY, much lower than forecasts, weighing down nickel prices. During European and US trading hours, the Standard & Poor's 500 Index, Dow Jones Industrial Average and Nasdaq Composite Index fell steeply without significantly negative news, so LME nickel prices extended declines and once hit a record low for the year of USD 16,396/mt, with prices finally closing at USD 15,720/mt, down USD 136/mt.
China's National Bureau of Statistics announced April 15 that the GDP for 1Q reached 11.8855 trillion yuan, based on the comparable prices, there was an increase of 7.7%, missing market expectations of an 8.0% growth. The economic growth at world's second largest economy again slowed down during the first quarter of 2013 after the a seventh consecutive quarterly decline came to an end in 4Q 2012. Among other figures, the industrial added-value grew 9.5% YoY, down 2.1 percentage points from the growth seen last year. Retail sales of social consumption goods amounted to 5.5451 trillion yuan, up 12.4% (nominal growth), suggesting that economic growth is recovering slowly, bolding bad for the commodity market.
The euro zone's trade balance for February grew to 10.4 billion euros, the largest surplus since 2004. In February, imports were down from January, and exports were up slightly, an indication that weak demand from consumers and enterprises inside and outside the region will likely curb its economic rebound in 2013. In the US, the international capital flows to the country were 53.6 billion dollars, smaller than January's scale. In February, US government bonds held by China were 1.22 trillion dollars and 109.7 million dollars, up slightly. The NY Empire State Manufacturing Index for April, however, fell to 3.05, much lower than market expectations and the previous level. The drop was due largely to sharp declines in new orders, suggesting that the US economic growth may have lost some upward momentum at the beginning of 2Q. With a slew of negative news, Nasdaq, S&P 500 and Dow Jones tumbled across the board.
In other news, the report released Monday by the Bank of Japan had upticked economic evaluation for its nine regions, supported by confidence improvement at households and enterprises and a sign of foreign economic recovery.
Euro zone and US CPI, Germany's ZEW climate index and US housing starts and building permits data will be released today, if they come in disappointing, LME nickel prices will continue to fall. LME nickel prices will fall to USD 15,250-15,500/mt today. Spot nickel prices in Shanghai are expected between RMB 106,500-108,500/mt.