[Ni Price] SMM Nickel Market Daily Review (2015-8-10)

SHANGHAI, Aug. 11 (SMM) – SMM #1 nickel prices were between RMB 80,000-81,100/mt. Premiums of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading were RMB 200/mt in the morning. Jinchuan nickel was actively traded at term contracts, while downstream buyers remained on the sidelines, with traded prices between RMB 80,200-80,800/mt. Nickel futures prices rebounded in the afternoon, with spot premiums of Jinchuan nickel narrowing to RMB 100/mt. Trading among traders was sluggish, but downstream replenished stocks proactively on market optimism, with traded prices between RMB 80,600-81,100/mt. Jinchuan Group lowered nickel price by RMB 500/mt to RMB 80,700/mt.

SMM surveyed 30 market players to find that 5 of them are bullish, 17 are neutral and 8 are bearish.

The 17% optimistic ones believe LME nickel price will move between USD 11,000-11,200/mt. China’s A-share market stabilized now that measures by Chinese government had shown results, helping ease market concerns and bolstering base metals. US economic indicators fell short of market expectations, especially inflation rate was sluggish. This may put off a possible interest rate by the Fed and weigh on the US dollar. With the exception of Greece, other economies in the eurozone improved. LME nickel prices are expected to rebound to the 20-day moving average, but any upward room for SHFE 1509 nickel contract prices will be limited due to oversupply, moving between RMB 81,500-83,000/mt.

56% think LME nickel prices will fluctuate between USD 10,850-11,000/mt. Some economists believe the Fed will raise interest rate in September. Major economic data from the US released last week remained high, though worse than market expectations, meaning US economic is on an upward track, which will bolster the US dollar. Despite positive economic indicators from eurozone, Greek problem remains a concern of markets. China’s A-share market surged Monday, but China real economic remained lackluster. Besides, domestic stainless steel plants cutting output and growing nickel inventories will constrain nickel price gains. SHFE 1509 nickel contract prices will move between RMB 80,500-81,500/mt.

27% are bearish, seeing LME nickel prices falling to USD 10,650-10,850/mt. China’s CPI in July slid, and M2 met its target. Nickel imports surged, and NPI capacity grew, adding to oversupply. However, demand for nickel will weaken due to anti-dumping measures imposed on China’s stainless steel and output cut by stainless steel plants. Besides, China’s real estate market has just stabilized. SHFE 1509 nickel contract prices will dip to RMB 79,000-80,500/mt.