Commodity Trading Tips for Nickel by KediaCommodity

Ajay Kumar Kedia 2 September 2014

Nickel Nickel settled down -0.52% at 1134.40 finished mostly lower on demand concerns, after manufacturing sectors in Europe and China slowed below forecasts in August. US markets were closed yesterday due to the Labor Day public holiday. While China’s official PMI measure, which is oriented to larger companies, showed a slowing pace of expansion in August, coming in at 51.1, below July levels of 51.7 and forecasts of 51.2. The smaller company-oriented Markit survey measure fell from 51.7 in July to 50.2 in July, below forecasts of 50.3. Meanwhile, manufacturing PMIs across the Eurozone, UK, India and Japan stabilised or weakened in August but continue to remain in expansion territory. US manufacturing is slated to come out later tonight. A reading above 50 indicates an expansion in manufacturing activity. The readings are consistent with slowing growth in economic activity and commodity demand. Trader anticipate manufacturing growth in China to continue through 2H14, as China’s government backstops growth with policy ‘fine-tuning’. The fall in China’s PMI potentially indicates that China’s government may be comfortable with slower manufacturing growth than many in the market expect. Last week Nickel has been able to advance despite its constantly increasing inventories, as Stockpiles tracked by the LME added 25% this year to reach a record high at 324,466 metric tons. According to Goldman Sachs, Nickel’s surplus will decrease to 20,000 tons in 2014 from 150,000 tons in 2013 before fluctuating into a deficit of 210,000 tons in 2015. Technically market is under fresh selling as market has witnessed gain in open interest by 2.25% to settled at 4005, now Nickel is getting support at 1129.6 and below same could see a test of 1124.7 level, And resistance is now likely to be seen at 1141.9, a move above could see prices testing 1149.3.