SHANGHAI, Jun. 6 (SMM) – LME nickel prices overnight opened at USD 15,280/mt, with the high end of the price range USD 15,444/mt, and finding support at USD 15,150/mt. Finally, LME nickel prices closed at USD 15,190/mt, down USD 51/mt from the previous trading day. Trading volumes increased by 236 lots, to 3,284 lots, and total positions increased by 1,813 lots, to 116,425 lots. Inventories fell 534 mt, to 179,898 mt.
LME nickel prices overnight opened at USD 15,280/mt, rising during Asian trading hours, and touching USD 15,444/mt. The number of US May ADP newly-increased jobs was 135,000, falling far short of the 170,000 expected, impairing optimism towards non-farm employment data, weighing down the US dollar index. But as prices divorced from fundamentals, LME nickel prices rolled back early gains and finally closed at USD 15,190/mt, down USD 51/mt.
US economic data released overnight was mixed. The number of US May ADP employment increased by 135,000, lower than expectations, with 138,000 contributed by the servicing sector, and with a decline of 3,000 in the manufacturing. US ISM non-manufacturing index in May improved from 53.1, to 53.7. The job market grew slowly due mainly to fiscal problems after US tax rate increase and government spending cuts. Investors' optimism towards the non-farm employment data decreased due to the sluggish ADP data, so base metals prices lost early gains.
PMIs in May in Italy, Germany and euro zone were all below expectations, with French PMI level with expectations, and UK PMI was better than forecast at 54.9. Euro zone revised Q1 GDP was also worse than forecasts, causing concerns of euro zone economic outlook, and dragging down European stocks markets. European central bank will decide its interest rate today.
Japanese Prime Minister Shinzo Abe unveiled the third arrow of Abe's "three arrow" strategy, including 10 reform measures. But the reforms lack details and power, and was below market expectations. The Nikkei thus plunged by 3.83%.
HSBC's May manufacturing PMI for China was 51.2, topping expectations, and the second lowest in 21 months. HSBC's May PMI for China was 50.9, the lowest since October 2012. China will face downturn risk in Q2 due to sluggish manufacturing and service.
The US dollar index fell by 0.25%; US stocks markets dropped across the board by 1%, with the euro against the US dollar up 0.07%; Asian stocks markets mostly dropped. LME base metals prices were mixed.
The market expects European central bank's benchmark rate for June due to be released today will remain unchanged. Euro zone Q1 GDP was revised downward from -1.0%, to -1.1%, pointing to sluggish economy, so easing policies are expected to be unveiled from the policy meeting. LME nickel prices will move between USD 15,000-15,400/mt today, and spot nickel prices in Shanghai are expected to be between RMB 105,500-107,500/mt.