[Ni] CBI Noon Review - 2009/7/24 Nickel Market

SHANGHAI, July 24 (CBI China) -- LME nickel price closed at USD 16,250/mt, down USD 50/mt. Today, the electronic trading in Asia showed weak performance in the morning, and nickel price opened at USD 16,350/mt, and then moved downward to USD 16,235/mt, down USD 16/mt, due mainly to stronger US dollar index.

    According to China Customs, China’s imports of nickel metal were 120kt from January to June, while total imports were 118,103mt in 2008 and 105.3kt in 2007, so imports in 1H 2009 have grown by 1.6% compared to total imports in 2008. However, the huge imports have not been fully consumed by producers, and most of them became inventories. In this context, nickel price will likely remain low in the long run due to huge inventories, even the economy improves and the downstream demand recovers.

    In Shanghai nickel market, the supply was ample, and traders were reluctant to reduce prices given current great price spread between LME and domestic nickel prices. However, producers were also unwilling to purchase with higher prices. Hence, although the weekend is drawing near, the downstream producers had no interest in replenish stocks, leading to sluggish trading sentiment.

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