SMM Nickel Market Daily Review (2014-8-11)

SHANGHAI, Aug. 12 (SMM) – SMM #1 nickel prices were between RMB 129,300-129,700/mt, with spot trading quiet in the morning. Trading volumes were mostly below 50 mt, with prices between RMB 129,400-129,800/mt. Prices on the Wuxi electronic trading fell with LME nickel prices at 3:00 pm, causing spot quotes to drop in response. Trading volumes also increased, but were made within 100 mt, with prices between RMB 128,900-129,200/mt. End-user demand did not improve.

SMM surveyed 36 market players and found that 56% are neutral toward zinc prices this week, seeing nickel prices move between USD 18,500-18,800/mt. Nickel prices will lack ability to rise given sluggish downstream demand, but Indonesia will unlikely loosen regulations on the export of unprocessed ore.

33% are bearish, anticipating LME nickel prices will hover between USD 18,300-18,500/mt. LME nickel inventories have broken through 318,000 mt, and grown 21.66% since the start of the year. In addition, neither nickel ore nor NPI prices improved, with FOB nickel ore prices from the Philippines remaining on a downward track.

The remaining 11% are bullish, believing LME nickel prices will fluctuate between USD 18,800-19,100/mt. they think domestic spot nickel prices did not drop as significantly as LME nickel prices, and traders will purchase at lows whilst selling at highs. When combined with optimistic retail sales and industrial value added at large enterprises slated for release this week, LME nickel prices will find support.