Nickel on MCX settled down -1.38% at 685.8 as LME nickel closed down 1 percent at $10,310 as Chinese industrial production data for last month missed forecasts. Data from the International Nickel Supply Group indicated that the global nickel market returned to a balance in late August. The Group still sees a deficit for the first eight months of the year of 47,300 tons, with the possibility for a widening shortfall through the rest of the year, supported by increased Chinese demand and the fall in nickel output. It is important to note that the full results of the Philippines’ mining inspections and ensuing suspensions came in late September. On the supply side, world mine output fell 6.9% to 1.3457 million tons in the first eight months of the year, mainly due to a 21% drop in Philippine output across the period. Chinese banks extended $181 billion in new loans during September, contributing to a record nine-month run. China’s economic growth is important to the nickel market because nickel’s primary use is as a component of steel. As China’s economy grows, more building takes place, and this is good for nickel demand. There have been concerns that after high borrowing to stimulate the economy, China would clampdown on credit, and the economic rebound would stutter. In September, much of the credit growth was driven by an increase in home mortgages, and the country is starting to impose property restrictions to cool its red-hot real estate market. Technically market is under fresh selling as market has witnessed gain in open interest by 15.62% to settled at 14497, now Nickel is getting support at 678.1 and below same could see a test of 670.5 level, And resistance is now likely to be seen at 693.1, a move above could see prices testing 700.5.

Trading Ideas:

Nickel trading range for the day is 670.5-700.5.

Nickel dropped as LME nickel closed down 1 percent at $10,310 as Chinese industrial production data for last month missed forecasts.

Data from the International Nickel Supply Group indicated that the global nickel market returned to a balance in late August.

On the supply side, world mine output fell 6.9% to 1.3457 million tons in the first eight months of the year, mainly due to a 21% drop in Philippine output.