SHANGHAI, Jun. 18 (SMM) – In Shanghai, Jinchuan nickel prices were between RMB 102,400-102,600/mt in the morning session, and Russian nickel prices were between RMB 101,400-101,600/mt. Demand remained soft due to the lack of market confidence, despite LME nickel prices were low. Besides, transactions made among traders were also muted as domestic nickel prices fluctuated narrowly.
A most recent SMM survey shows that 50% of market participants believe LME nickel prices will continue to rise to RMB 14,400/mt. It was reported the SRB will purchase about 30,000 mt of nickel in China, and it has purchased 60,000 mt of nickel since the start of this year. SMM confirmed SRB has built stocks by nearly 60,000 mt since Q4 last year, and most of the purchases are Russian and Jinchuan nickel. The purchase will help ease supply surplus. LME nickel prices should continue to rebound in the interim as shorts left the market after profit-taking and since large numbers of longs enter the market.
30% market players believe LME nickel prices will fluctuate between RMB 14,100-14,400/mt. They think whether or not the US Federal Reserve will signal at its policy meeting that they will scale back stimulus will dominate nickel prices in the interim.
20% market participants believe LME nickel prices will fall below USD 14,000/mt. LME nickel inventories grew to a record high of 183,720 mt during the Dragon Boat Festival in China. China's May CPI and PPI both fell short of expectations, and investments, industry production and consumption data were also sluggish, further depressing market sentiment. As a result, the World Bank lowered its outlook for China's economic growth in 2013. Besides, Greek assets auction encountered difficulties, and its government bond yields climbed significantly. Euro zone data released recently remained sluggish, with concerns over an end to QE3 overshadow the market. In this context, a plummeting US dollar index will be unable to boost base metals prices. Some investors believe LME nickel prices will fall to as low as USD 13,500/mt this year.