Nickel settled up 3.62% at 1209.40 continued to lift on supply concerns, finishing above 1200 level. Last week, Vale closed its ~40ktpa nickel plant in New Caledonia after an accidental spill. The closure adds to growing deficit concerns in the nickel market following the mineral ore export ban early this year in Indonesia, and as concerns grow that Ukraine tensions could result in trade sanctions against Russia, the world’s second biggest refined nickel producer. Nickel raced to its strongest level in more than two years last week as industrial consumers scrambled to secure supplies and speculators extended their buying spree after Vale halted its Goro nickel operations in New Caledonia. Though the Goro shutdown was not expected to have a major impact on physical nickel supplies, it served to fire up bullish sentiment and chart-based buying. The nickel market, which has soared nearly 40% this year, was already nervous about shortfalls from top producer Indonesia and worried about potential Russian supply problems. Nickel prices have been on the upswing since Indonesia banned exports of ore in January and recently received a fillip from worries that sanctions against Russia could hit top refined producer Norilsk Nickel. Prices have also been supported recently by nickel buyers in China and Japan scrambling to secure supplies as fear of shortages boosts demand for both refined metal and long-term ore contracts. Also support seen as appetite for base metals also picked up after China’s exports rose slightly in April, beating forecasts for a decline. Technically market is under short covering and getting support at 1177.6 and below same could see a test of 1145.8 level, And resistance is now likely to be seen at 1237.6, a move above could see prices testing 1265.8.

Trading Ideas:

Nickel trading range for the day is 1145.8-1265.8.

Nickel rose as worries about reduced supply bolstered investors' appetite for the metal.

Nickel buyers in China and Japan are scrambling to secure supplies as soaring prices and a fear of shortages boosts demand.

China's PPI in April was -2%, better than the -2.3% in March, but the decline shows China's manufacturing demand is still sluggish.