SMM Morning Review - 2010/2/4 Nickel Market

SHANGHAI, Feb. 4 (SMM) -- On Wednesday, LME nickel prices opened at USD 18,300/mt and closed at USD 18,300/mt, with the highest level at USD 18,510/mt and the lowest level at USD 18,060/mt. Daily trading volumes were 1,359 lots and positions were 87,508 lots.

Economy in Euro zone suffered from a heavy blow due to high proposition of financial deficit. Only shortly after concerns over credit crisis was eased to an extend, Spain stated on Wednesday that budget deficit in 2010 accounts 9.8% of its GDP, exceeding the warning line in the Euro zone. In this context, the previous weak US dollar experienced strong performance again, and hit the heavy pressure level at 79.5. The Reserve Bank of Australia stopped to raise interest rate unexpectedly yesterday, showing concern over previously optimistic expectation of economy recovery. The problems with regard to the financial deficit and how to maintain economic development in a sustainable and sound way in all countries became more and more serious, which will expert heavy pressure on economy development in the future and will also exert negative impact on vulnerable base metal markets.

Closing prices were flat with opening prices, but LME nickel prices gradually fluctuated narrower from December 30, 2009, and are expected to make a breakthrough recently. Downward momentum for LME nickel prices may be stronger under current unstable economic climate. It is expected that, LME nickel prices will move in the USD 17,900-18,400/mt range today.

To contact the writer on this report: angelawang@smm.cn

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