Nickel settled up 4.42% at 1262.90 skyrocketed to a 19-month high on mounting supply concerns. Indonesia, banned exports of unprocessed ores in January 2014, while Russia, may face severe sanctions from the West as situation in Ukraine remains tense. From the negative side, nickel inventories at the LME warehouses stood 55% higher compared to the same period last year. Vale, the mining giant halted the production at its New Caledonia's Goro nickel mining plant due to acidic effluent spill. The president of New Caledonia’s Southern Province, Cynthia Ligeard, ordered Vale, after the spilling of about 100k liters of effluent up in a creek. A joint mission sent by the provisional government and the environmental authority evaluate the state of the plant worth USD 6 billion. Vale said that the effluent spill is due to the solution transferring circuit misconfiguration and now the water quality in creek is back to normal. Due to this spillage, nickel price hit a two year high in LME, reached $20,450. This is the biggest one day rise in four year apart from supply concerns due to Indonesian bar on nickel. This year, the Goro mine had targeted to deliver around 40k tonnes of nickel this year. Glencore Xstrata also said that outturn from its Koniambo Mine, also in New Caledonia had been unsatisfactory. Meanwhile Indonesia expects that its nine nickel smelters may be finished this year after the iron ore ban imposed on the largest mined producer in January 2014. Technically market is under fresh buying and getting support at 1225.2 and below same could see a test of 1187.6 level, And resistance is now likely to be seen at 1290.2, a move above could see prices testing 1317.6.

Trading Ideas:

Nickel trading range for the day is 1187.6-1317.6.

Nickel skyrocketed on mounting supply concerns, on news that Vale suspended work at its Goro operations.

Nickel prices gained since January after Indonesia banned the export of nickel ore.

Data from China showed exports unexpectedly increasing in April further supported nickel.