The three-month nickel price on the London Metal Exchange was higher during morning trading on Wednesday September 18, edging back above the $17,000-per-tonne resistance level despite moderate turnover, while the rest of the complex consolidated lower.
Nickel’s outright price was recently seen at $17,170 per tonne, while trading volumes over the morning were modest at some 2,400 lots exchanged as at 9.30am London time.
Price action was subject to a slight uptick over the morning, but has sold-off by more than 8% since September 12, when nickel futures reached an intraday high of $18,400 per tonne.
“Metals came under further pressure during the majority of Tuesday’s session with weekend events in Saudi [Arabia] coupled with poor Chinese data resulting in further risk reduction,” Marex Spectron’s LME analyst Alastair Munro said in a morning report.
“But noticeably there was a decent exchange of turnover into the session lows with the news that [Saudi state-owned oil producer Saudi Aramco] had already restarted some production resulting in some sort of bounce into the close on the base. This pick-up continued overnight with the whole complex opening in the black. But since London opened some commodity training advisor (CTA) selling has re-emerged,” he added.
Similarly deterring forward nickel business, the metal’s forward curve on the LME remains tight, with nickel’s benchmark cash/three-month spread recently trading in a backwardation of $93 per tonne.
With today being the third-Wednesday prompt date, nickel’s nearby cash/October spread was also trading in a backwardation, recently seen at $20 per tonne, making near-term business costly.
Meanwhile, low turnover due to poor risk sentiment saw the rest of the complex consolidate lower over the morning, with three-month copper topping volumes at some 4,400 lots exchanged as at 9.45am London time.
The red metal’s outright price slipped below the $5,800-per-tonne support level this morning despite closing at $5,821 per tonne, while a rally in oil prices earlier this week had further pressured copper’s futures price, analysts confirmed.
Later, the market will await the US Federal Open Market Committee’s (FOMC) rate decision, statement, economic projections and press conference.
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