SMM Nickel Market Daily Review (2014-10-8)

SHANGHAI, Oct. 9 (SMM) – SMM #1 nickel prices were between RMB 114,900-115,300/mt, up slightly from before the Chinese National Day holiday. But trading was muted. Traders quoted RMB 700-800/mt below 1411 nickel contract prices on the Wuxi electronic trading, between RMB 115,000-115,400/mt. Prices on the Wuxi electronic trading rolled back early gains in the afternoon, and traders lowered their quotes to RMB 114,500-115,200/mt, with transactions mainly made among traders. Jinchuan raised nickel prices by RMB 500/mt to RMB 115,000/mt, with sales brisk.

SMM surveyed 32 market participants and found that 47% believe LME nickel prices will hover between USD 16,500-17,000/mt this week as a strengthening US dollar index will constrain LME nickel price gains.

31% are bullish toward nickel prices, seeing nickel prices stand at USD 17,000/mt. LME nickel prices dipped to a six-month low during the Chinese National Day holiday, but then rallied to the 5 and 10-day moving average. Prices are expected to maintain an upward track in the near term. Nickel ore supply will be affected as the monsoon in the Philippines’ Surigao – a major low and medium-grade nickel ore producing region – will set in October. Two companies including PGMC have no plan to move goods in October. When combined with falling high-grade nickel ore inventories in China, NPI production costs will rise. This will bolster LME nickel prices.

22% believe LME nickel prices will fall due to growing LME nickel inventories and rising US dollar index.