Nickel settled at 679.70 as support can be seen after the update that the global nickel market surplus shrank to 8,800 tonnes in June, from a revised surplus of 9,500 tonnes in May, but was larger than a surplus in the same month last year, a monthly report from the International Nickel Study Group (INSG) showed. The weaker demand outlook for the metal coupled with large metal stocks may drag the prices. The bank has also lowered the stainless steel demand growth forecast from 4% earlier to 2.4%. The drop in stainless steel demand may affect global nickel consumption levels. Incidentally, stainless steel production industry accounts for approximately two-thirds of the global nickel demand. The nickel demand growth has dropped by 2% year-on-year during the first half of the current year. There has been a corresponding fall in nickel supply as well. The global nickel production declined almost 1.5% during H1 2015. The Indonesian ore export ban led to huge fall in Chinese nickel pig iron production. The global nickel pig iron production rose 6%, whereas the Chinese production tumbled by 22% during the initial six-month period of the year. LME nickel prices opened at USD 10,360/mt, then edged up and rose to RMB 10,480/mt. During European and US trading session, LME zinc prices fell then leveled out, and closed at USD 10,435/mt, up 0.82%. LME nickel inventories grew 1,194 to 456,168 mt. Technically market is under long liquidation as market has witnessed drop in open interest by -0.35% to settled at 26651 while prices down -0.1 rupee, now Nickel is getting support at 675.4 and below same could see a test of 671 level, And resistance is now likely to be seen at 684.8, a move above could see prices testing 689.8.

Trading Ideas:

Nickel trading range for the day is 671-689.8.

Nickel prices settled flat as prices seen supported as the dollar dropped after US housing starts grew fast in July.

The global nickel market surplus shrank to 8,800 tonnes in June, a monthly report from the International Nickel Study Group (INSG) showed.

China's equity market rout could signal more deeply rooted problems in its economy added to a seasonal lull, dragging on price prospects.