Commodity Trading Tips for Nickel by KediaCommodity

Ajay Kumar Kedia 24 July 2014

Nickel Nickel settled down -0.75% at 1137 after the report that Nickel's deficit narrows as China increases more-than-expected volumes of nickel pig iron, a cheaper alternative. Demand will exceed supply by 17,000 tonnes, down from the April estimate for a 30,000 tonne deficit. The market last year was in a 109,000 tonne surplus. Nickel is up 37 per cent this year, the most among the six main metals on the London Metal Exchange, as Indonesia, the biggest producer from mines, barred unprocessed ore exports in January. China's stockpiles of nickel ore, which is used to make nickel pig iron, have dropped this year to slightly more than 20 million tonnes from 25 million tonnes at the end of 2013. Market's earlier forecast that China's nickel pig iron output would begin falling this summer as inventories declined following Indonesia's ore export ban. LME nickel prices opened at USD 19,100/mt overnight, with the high end of the price range USD 19,100/mt, and finding support at USD 18,950/mt. Finally, LME nickel prices closed at USD 19,030/mt, down USD 69/mt from the previous trading day. Also pressure seen after the update from International Monetary Fund (IMF) who lowered its forecast for US GDP growth for 2014 from 2% to 1.7% on Wednesday in light of the country’s sluggish economy in the first quarter. The IMF, however, kept its outlook for US growth in 2015 and 2016 unchanged at 3%. Technically market is under long liquidation as market has witnessed drop in open interest by -7.34% to settled at 4433 while prices down -8.6 rupee, now Nickel is getting support at 1131 and below same could see a test of 1125 level, And resistance is now likely to be seen at 1144.5, a move above could see prices testing 1152.