Nickel settled down -1.84% at 1128.3 as the dollar’s rally eroded the appeal of industrial metals as alternative investments. Dollar headed for the biggest monthly gain since May 2013 as U.S. unemployment claims in the past four weeks fell to the lowest since 2006. This year, nickel inventories tracked by the London Metal Exchange have climbed 21 percent to a record 315,798 metric tons. The metal has climbed 33 percent this year, partly because Indonesia in January barred shipments of unprocessed ores, spurring concerns that supplies will trail demand. LME nickel prices lacked ability to rise and struggled around USD 19,000/mt, LME nickel prices slumped to USD 18,450/mt, rallying to USD 18,510/mt. The number of US initial jobless claims last week outpaced 300,000, and Chicago's manufacturing index also dropped. That being said, base metals price declines across the board are not directly attributable to the negative economic data. LME nickel prices have been sluggish due to high inventories. Also market sentiments dropped after the update that Indonesia had put out an offer to reduce taxes on concentrate exports in a bid to end a six-month halt of concentrate exports. In line with expectations, Freeport was the first to sign the deal, and with its export permit in place, the company plans to resume operations immediately. Technically market is under fresh selling as market has witnessed gain in open interest by 66.95% to settled at 197 while prices down -20.9 rupee, now Nickel is getting support at 1123 and below same could see a test of 1112.7 level, And resistance is now likely to be seen at 1150.8, a move above could see prices testing 1168.3.

Trading Ideas:

Nickel trading range for the day is 1106.5-1165.5.

Nickel fell as the dollar’s rally eroded the appeal of industrial metals as alternative investments.

Indonesia had put out an offer to reduce taxes on concentrate exports in a bid to end a six-month halt of concentrate exports.

Nickel already climbed 33 percent this year, because Indonesia in January barred shipments of unprocessed ores, spurring demand.