Nickel settled up 1.82% at 859.50 as two significant production cuts were announced in the nickel market in the past week which will signify around 33,000t of lost production in 2014. Prices rallied despite of the near-week long US government shutdown which raised fears Congress may struggle to raise the US debt ceiling. Prices rallied on the speculation that the long-awaited restrictions on ore exports from Indonesia will be materialise. While Markets were also mulling over how the political deadlock in Washington will impact on negotiations to raise the US debt ceiling, which the US Treasury Department has estimated will be reached by October 17. The shutdown prevented the release of September's non-farm payrolls report last Friday and speculation is increasing that if the shutdown runs into the debt-ceiling deadline, the US could see its sovereign credit rating lowered. In the week ahead, investors will be looking ahead to Wednesday's minutes of the Federal Reserve's most recent policy-setting meeting, amid ongoing uncertainty over when the central bank will begin tapering its USD85 billion a month asset purchase program. The overall outlook for nickel depends on the Indonesian government's decision on ore exports; if nothing changes production closures will be inevitable, but a ban or unexpected event could still turn the market. Nickel prices have fallen almost 20% this year, more than any other base metal, and are expected to remain under pressure due to a growing surplus. Technically market is under short covering and Nickel is getting support at 842.9 and below same could see a test of 826.3 level, And resistance is now likely to be seen at 869.8, a move above could see prices testing 880.1.

Trading Ideas:

Nickel trading range for the day is 826.3-880.1.

Nickel rose as two significant production cuts were announced in the nickel market which will signify around 33,000t of lost production in 2014.

Nickel face a global surplus of 140 000 t this year due to disappointing demand and new production projects.

LME'S three-month nickel price has fallen 20% so far this year, making it the worst performer by far of the big six base metals.