Nickel settled up 1.12% at 878.9 on speculation that demand for the metal used in corrosion resistance in stainless steel will increase. Crude stainless steel production will increase 4.6 percent to a record 39 million tons in 2014. Output in China, the world's top user, will climb by 6.8 percent to 19.3 million tons in 2014, representing almost 50 percent of global production. China is the biggest importer of nickel ore from Indonesia. The Southeast Asian nation, which imposed a ban on exports of unprocessed ore on Jan. 12, is the world's biggest nickel ore producer. In the US unemployment rate fell to a new five-year low of 6.6% in January, further approaching the US Federal Reserve's 6.6% threshold. The nation's nonfarm payrolls added during the same period by 113,000, significantly up from December's level, but still far less than forecasts. Nevertheless, markets showed no angst, blaming severe weather for the downbeat job data. It was also worth noting that US labor participation rate rose to 63% from the December trough of 62.8% since 1978. Market risk appetite thus was boosted, and US shares ended up across all boards. LME base metals prices also sustained gains. In addition, US finance minister reiterated the country's debt ceiling, indicating that emergent measures are being taken to avoid reaching the ceiling. The US debt ceiling will be due on February 27, and investors risk appetite is inevitably being affected with the approach of the deadline. Now Nickel is getting support at 871.4 and below same could see a test of 863.8 level, And resistance is now likely to be seen at 885.2, a move above could see prices testing 891.4.

Trading Ideas:

Nickel trading range for the day is 863.8-891.4.

Nickel rose on speculation that demand for the metal used in corrosion resistance in stainless steel will increase.

Crude stainless steel production will increase 4.6 percent to a record 39 million tons in 2014.

Output in China, will climb by 6.8 percent to 19.3 million tons in 2014, representing almost 50 percent of global production