Nickel settled down -3.47% at 1115.70 after stockpiles of the metal surged the most in more than five years to a record, easing supply concerns. Inventories tracked by the London Metal Exchange jumped 6.7 percent to 305,970 metric tons, leaving stocks up 17 percent this year, bourse data show. Through yesterday, prices climbed 38 percent this year amid concern that demand will exceed production after Indonesia, the world’s biggest producer from mines, banned raw-ore exports in January. Stocks of nickel swelled on deliveries to warehouses in Rotterdam, Singapore and Malaysia’s Johor. Open interest, or the aggregate number of futures contracts yet to be closed, liquidated or delivered, rose to a record on May 13, data showed. Buying and selling of nickel futures and options jumped 79 percent last month from a year earlier, according to LME data this week. Also the US Federal Reserve (Fed) decided to maintain easy monetary policy, pushing down the US dollar index and giving support to base metals prices. But LME nickel inventories surged 19,242 mt, weighing down LME nickel prices again. The growth in stocks may be a result of delivery for LME 1406 zinc contracts or China’s probe into financing fraud at the Port of Qingdao, which caused China’s goods to flow to LME warehouses. Technically market is under long liquidation as market has witnessed drop in open interest by -18.07% to settled at 5952 while prices down -40.1 rupee, now Nickel is getting support at 1101.8 and below same could see a test of 1087.8 level, And resistance is now likely to be seen at 1141.6, a move above could see prices testing 1167.4.

Trading Ideas:

Nickel trading range for the day is 1087.8-1167.4.

Nickel slid after inventories jumped to record high, reminding investors that the price has rallied this year ahead of expected shortages

Prices also seen under pressure on profit booking after prices gained on renewed concerns over disruptions in Russian supply.

Nickel prices is expected to go into a deficit later this year after Indonesia imposed a ban on shipments of unprocessed ore.