SMM Morning Review - 2009/12/7 Nickel Market

SHANGHAI, Dec. 7 (SMM) -- LME nickel prices opened at USD 16,080/mt last Friday, with highest and lowest level at USD 16,400/mt and USD 15,825/mt, respectively, and finally prices ended at USD 16,080/mt.  Total trading volumes reported 1,850 lots, and positions were 95,158 lots.

The US Labor Department released on Friday that the US non-farm employment in November decreased by 11,000, the smallest decline since the beginning of economic recession in December 2007, and much lower than the expected level of a decrease of 130,000, improving investor optimism that the US economy will recover rapidly, and raising market expectations that the interest rate of US dollar will be lifted. In this context, the US dollar rebounded significantly, helping drive up the US dollar index to 75.94. However, the US government will not adjust the loose monetary policy before the real recovery of US economy and will continue to maintain interest rate at low levels, so the US dollar index is expected to move between 74.5-75.5 in the short term in response, helping support base metals prices, and any downward movements in base metal prices caused by significant declines in gold prices will be limited.

LME nickel prices received strong support at USD 16,000/mt, and are expected to move in the USD 15,900-16,500/mt range today, with limited upward room given the drops in the US dollar index.

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