SMM Nickel Market Daily Review (2014-8-4)

SHANGHAI, Aug. 5 (SMM) – SMM #1 nickel prices were between RMB 128,300-128,900/mt. Spot nickel prices in Shanghai only dropped by RMB 350/mt from last week. Prices of 1408 nickel contracts on the Wuxi electronic trading were firm, moving between RMB 128,000-128,650/mt as of 5:00 pm. Spot prices were between RMB 128,300-128,900/mt in the morning, and slid to RMB 128,000-128,500/mt in the afternoon, with trading mainly made among traders. SMM learned that some stainless steel plants increased purchases for nickel, and will keep an eye on this issue.

With regard to nickel price trends this week, SMM surveyed 36 market players and found that 66% think LME nickel prices will fluctuate between USD 18,200-18,600/mt. Due to limit major economic news, LME nickel prices should level out.

28% are bearish, believing LME nickel prices will fall to move between USD 17,800-18,200/mt. LME nickel inventories had grown by 21.5% from last year’s end to 317,600 mt as of August 1, which will undermine long momentum. When combined with the slow season, nickel prices will lack ability to rise. LME nickel prices are expected to dip to USD 17,800/mt once falling below USD 18,000/mt.

6% believe LME nickel prices will rise to USD 18,700-19,000/mt. They think LME nickel prices will have little room to fall further now that they have dropped to USD 18,300/mt. Besides, spot nickel prices are more resistant to declines compared to LME nickel prices. Coupled with optimistic major economic news and sufficient capital, LME nickel prices look set to rise.