SHANGHAI, Oct. 29 (SMM) – In Shanghai, transactions of Jinchuan nickel were muted, with trading mainly made for Russian nickel. SMM #1 nickel prices were between RMB 99,400-100,400/mt, with transactions quiet. Although LME nickel prices rose in the afternoon, spot prices in Shanghai remained largely unchanged, with Jinchuan nickel prices around RMB 100,200/mt and Russian nickel prices around RMB 99,300/mt.

SMM surveyed 36 market players and found that 28% believe LME nickel prices will rise to USD 14,700-15,000/mt this week. With the release of China's 383 reform report, the market expects Chinese economy will improve due to economic reform, giving support to nickel prices. US non-farm employment data in October is pessimistic due to the US government shutdown, which will weigh on the US dollar index and positively affect LME nickel prices.

44% think LME nickel prices will move between USD 14,500-14,700/mt this week. Although China's economic data are optimistic, China's cash flow tightness remains. Rising inter-bank rate at commercial banks triggered concerns over money crunch, which will cause risky asset selloffs. Despite optimism toward the result from the Third Plenary Session of the 18th CPC Central Committee, LME nickel prices will level out.

28% believe LME nickel prices will drop below USD 14,500/mt. increasing LME nickel inventories and canceled warrants mirrored sluggish downstream demand, keeping traders out of the market. When combined with the poor market fundamental and tight liquidity in China, LME nickel prices will test support from the 10-day moving average this week.