SMM Nickel Market Daily Review (2014-7-7)

SHANGHAI, Jul. 8 (SMM) – SMM #1 nickel prices were quoted between RMB 130,000-130,500/mt, with transactions quiet. Traded prices were between RMB 129,900-130,500/mt in the morning, and as low as RMB 129,500/mt in the afternoon. Jinchuan lowered nickel prices by RMB 3,500/mt to RMB 131,500/mt.

SMM surveyed 36 market players and found that 50% are neutral toward nickel price trends this week, believing LME nickel prices will hover between USD 19,000-19,400/mt. Positive macroeconomic news from China will lend some support to LME nickel prices, but a rising US dollar index will weigh on nickel prices. Demand from stainless steel mills softened in the off-season, and Jinchuan produced 68,852 mt of nickel as of June 25, which is 0.23% higher than the target for 1H. Given sufficient domestic nickel supply, LME nickel prices will lack ability to rise.

25% are pessimistic, believing LME nickel prices will move between USD 18,700-19,000/mt. The US dollar index has closed with gains for four days in a row, and is now testing the 20-day moving average. The Fed will release its minute for the meeting held June 18, and US June non-farm employment data is optimistic, which will push up the US dollar index and weigh down LME nickel prices.

25% are bullish, thinking LME nickel prices will move between USD 19,400-19,800/mt. LME nickel prices are on an upward track, when combined with optimistic economic data from China, a large number of longs are expected to enter the market. In addition, Indonesian president stated Indonesia’s ban on the export of unprocessed ore will not be reversed, which will underpin nickel prices.