SHANGHAI, Jun. 13 (SMM) – LME nickel prices overnight opened at USD 14,525/mt, with the high end of the price range USD 14,525/mt, and finding support at USD 14,260/mt. Finally, LME nickel prices closed at USD 14,261/mt, down USD 221/mt from the previous trading day. Trading volumes decreased by 72 lots, to 4,488 lots, and total positions increased by 2,908 lots, to 118,034 lots. Inventories grew 2,908 mt, to 182,274 mt.
The upbeat US non-farm employment data pulled down base metals prices. As China's data was sluggish, and due to Greek government bond selling problem, increasing concerns over an end to QE3, apprehension over China's economic outlook and unstable euro zone situations, LME nickel prices closed out the past three days with declines, closing at USD 14,261/mt overnight, down USD 221/mt from the previous day.
The US May non-farm employment announced last Friday beat forecasts. Despite a slight rise in unemployment rate, the labor force participation rate improved for the first time since last October, suggesting mild recovery in the country's labor market. However, this also fuelled fear that the US Federal Reserve (Fed) will wind down QE3 early, weighing down base metals. The S&P revised US sovereignty credit rating from negative to stable on Monday, keeping investors even more worried about the Fed's possible exit of monetary stimulus.
UK ILO unemployment fell 5,000 between February and April, better than the 15,000 growth in the previous quarter. Industrial production in the euro zone contracted 0.6% in April, but was still better than the 1.7% contraction in March and the 1.1% estimate, strengthening the euro.
China's exports, industrial value-added and power consumption in May all grew at a slower pace, sparking concerns over metal demand in the world's second largest economy. This triggered technical selling, dragging base metals down. The Bank of Japan (BOJ) decided to keep easing monetary policy in place, disappointing investors. Japan's core machinery orders in April missed forecasts. On the other hand, Australia's Consumer Sentiment Index grew 4.7% in June, compared with a 7.0% decline in May, lending some support to base metals.
The US dollar index lost 0.14%, a fresh low since February; US stocks markets closed with losses. The euro against the US dollar recorded a 3-day winning streak. LME base metals fell across the board.
LME nickel prices will move between USD 14,000-14,500/mt today, and spot nickel prices in Shanghai are expected to be between RMB 101,000-103,000/mt.