Nickel settled down -1.62% at 851.10 after the report that China’s nickel ore reserves will be sufficient in a year, and this caused selloffs of nickel futures as European and US market believe positive effects from Indonesia’s ban on nickel ore exports were undermined, which pushed down nickel prices overnight. LME nickel prices opened at USD 13,830/mt with the high end of the price range USD 13,895/mt, and finding support at USD 13,550/mt. Finally, LME nickel prices closed at USD 13,580/mt, down USD 290/mt from the previous trading day. Recent past prices was supported by a looming ban on ore exports in Indonesia that accounts for about 18-20% of the global nickel supply. The ban on nickel-ore exports  will come in force on January 12 and is intended to boost value of the country’s  exports by stimulating local processing of the base metals. Meanwhile, LME inventories gained 0.85% last week and remained almost 84% higher than in the same period last year. Also in China, 11 companies have released their Prospectus, the highest number so far for this round of IPO resumption, meaning a total of 26 companies, roughly one third of the 82 companies securing approvals for IPOs, were confirmed to issue initial offerings. The rapid expansion raised fears that Chinese stock markets may see sharp declines. Technically market is under fresh selling as market has witnessed gain in open interest by 65.4% to settled at 11275 while prices down -14 rupee, now Nickel is getting support at 842.3 and below same could see a test of 833.6 level, And resistance is now likely to be seen at 864.5, a move above could see prices testing 878.

Trading Ideas:

Nickel trading range for the day is 833.6-878.

Nickel prices dropped on speculation that quickening U.S. growth this year may increase the odds for Fed to accelerate its tapering of stimulus.

HSBC’s China service PMI was reported at a 28-month low in December due to weakening demand by year’s end, reflecting slower expansion in China’s service sector.

Market players were still waiting for the minutes from Fed’s December policy meeting the December nonfarm payroll report.