Nickel on MCX settled down -1.31% at 604.8 on profit booking tracking weakness in LME prices dropped by 1.5 percent to $9,345 as a smaller discount indicates tighter supply. The discount of LME cash nickel to the three-month contract shrank to $50 a tonne from $67.50 late last month, the largest since January 2015. World's nickel market was in deficit of 20,000 tonnes during the first two months of 2017, according to latest data from World Bureau of Metal Statistics (WBMS). According to WBMS, the supply deficit was 62,000 tonnes for the whole year of 2016. Refined production from January to February 2017 was 272,100 tonnes and demand was 292,200 tonnes. In recent months, news stories on nickel have been dominated by concerns over supply of nickel ores and concentrates from the Philippines and Indonesia. In the Philippines, an environmental crackdown led to the closure of 23 mines and the suspension of a further eight, which together account for an estimated 49% of nickel production in the country in 2016. According to data, China's nickel ore inventories at ports have been falling. Inventories of nickel ore at China's major ports were about 7.80 million tonnes by the end of March, and those ores were only 2.9-month sufficient for production at domestic high-grade NPI producers, down to a new record low, a sign that nickel ore supply was below demand. Amid the supply shortages, prices of Ni 1.5% ore held firm. Technically market is under fresh selling as market has witnessed gain in open interest by 0.16% to settled at 35917 while prices down -8 rupees, now Nickel is getting support at 600.2 and below same could see a test of 595.5 level, And resistance is now likely to be seen at 613, a move above could see prices testing 621.1.

Trading Ideas:

Nickel trading range for the day is 595.5-621.1.

Nickel dropped on profit booking tracking weakness in LME prices dropped by 1.5 percent to $9,345 as a smaller discount indicates tighter supply.

World's nickel market was in deficit of 20,000 tonnes during the first two months of 2017, according to latest data from WBMS.

The discount of LME cash nickel to the three-month contract shrank to $50 a tonne from $67.50 late last month, the largest since January 2015.