SHANGHAI, Jun. 26 (SMM) – LME nickel prices overnight opened at USD 13,666/mt, with the high end of the price range USD 14,037/mt, and finding support at USD 13,525/mt. Finally, LME nickel prices closed at USD 13,900/mt, up USD 240/mt from the previous trading day. Trading volumes increased by 235 lots, to 4,259 lots, and total positions decreased by 126 lots, to 121,565 lots. Inventories fell by 114 mt, to 186,084 mt.
LME nickel prices overnight opened at USD 13,666/mt. The Shanghai Composite Index hit a record low for the year in the morning session of Asian trading hours, spurring market apprehension. The sluggish China's stocks weighed on LME nickel prices to open low and move lower, dipping to a new low for the year of USD 13,525/mt. But in the afternoon, LME nickel prices rebounded with the Shanghai Composite. During European and US trading hours, US housing figures and durable goods order index topped expectations, and Conference Board's June CCI jumped to a record high since January 2008, showing US economy is recovery. In this context, LME nickel prices extended gains and closed at USD 13,900/mt, up USD 240/mt.
China's A-shares and base metals fell in the morning Asian trading session due to apprehension over liquidity crunch in China, with A-shares tumbling to the lowest since February 2009 at 1,849 points. Financial markets, however, rebounded in the afternoon session, which some believe is attributable to anticipation that the People's Bank of China (PBOC) will send signals of loose monetary policy during the 2013 Lujiazui Forum press conference held in the afternoon. No clear signal was sent during the conference, though. Nevertheless, the PBOC released last night an article titled Adjusting Liquidity within Rational Level, Stabilizing Monetary Market, which showed the central bank's intention of injecting liquidity. The article says that although current liquidity is not in shortage, the PBOC has recently provided support to qualified financial institutions. The PBOC did not launch open market operations yesterday morning, with no issuance of 3-month Central Bank Bills and no initiation of repos or reverse repos. Markets are now expecting the central bank to resume reverse repos.
In the US, S&P/Case-Shiller data showed that home price composite index in 20 US cities rose 2.5% in April, the largest monthly growth on record. The Conference Board announced the US Consumer Confidence Index advanced from 76.2 to 81.4 in June, well above the 75.1 forecast. Durable goods orders in May grew 3.6% MoM, excluding a 0.7% growth in transport durable goods orders and a 9.3% gain in non-national defense capital new orders.
European and US stocks closed up. LME base metals closed with gains across the board.
LME nickel prices will move between USD 13,600-14,100/mt today, and spot nickel prices in Shanghai are expected to move between RMB 96,500-98,500/mt.