SHANGHAI, Sept. 8 (SMM) – SMM #1 nickel prices were between RMB 75,100-76,000/mt. Discounts of Jinchuan nickel against the most actively traded contracts on the Wuxi electronic trading were zero in the morning. Trading was brisk as downstream buyers replenished stocks proactively. Traders sold actively, with traded prices between RMB 75,100-75,800/mt. Spot nickel prices held stable in the afternoon as nickel futures prices fluctuated narrowly. Traders sold actively, but downstream buyers refrained from buying, with traded prices between RMB 75,200-75,900/mt.
SMM surveyed 30 market players to find that 20 are neutral toward nickel prices this week and 10 are bearish.
The 67% neutral ones think LME nickel prices will move between USD 9,800-10,050/mt. US economy is recovering despite mixed economic indicators released last week. However, economies in other countries deteriorate. This led to uncertainty whether the Fed will hike interest rate soon, leaving any upward room for the US dollar limited. China pushed additional measures to help stabilize financial markets and ease market nerves. Yuan’s exchange rate also stabilized. Meanwhile, continuous output cuts at domestic NPI producers and Philippine suppliers holding prices firm both lent support to nickel prices. SHFE 1601 nickel contract prices will move between RMB 76,000-77,500/mt.
33% are bearish, seeing LME nickel prices fall to USD 9,500-9,750/mt. With the exception of the US and some European countries, emerging markets remain in recession. Additional stimulus measures from China also underscore sluggish economy in the country. The NBS lowered gross domestic product growth in 2014 from 7.4% to 7.3%. China’s stainless steel plants will unlikely resume operation in the near term, while NPI producers will restart after the military parade in Beijing. Meanwhile, SHFE nickel due for delivery this month will reach 20,000 mt, adding to supply. SHFE 1601 nickel contract prices will fall to RMB 75,000-76,000/mt.