By Geena Paul
MUMBAI (Commodity Online): Most of the base metal prices will be depended on Chinese demand in 2010 and Nickel is no exception.

If indications from global markets are any hint, global primary nickel usage may recover around 1.35 million tonne. But, that is not enough. Prices are set to go up to a certain extend in 2010 also.

Hope lies in Chinese demand. A recovery of demand was seen in stainless steel production in China, Korea and Taiwan in the second quarter of 2009 and to lesser extent in Europe and the United States in the third quarter.

Primary nickel demand was strong in China and surrounding countries, with both real and apparent consumption increasing. In Europe and the United States demand is expected to decline in 2010 due to weak stainless steel production and also relatively high usage of nickel-containing scrap.

In 2010 it is possible that growth in stainless steel and nickel use will continue in China and in other parts of the world but at slower rate.

Nickel has been the laggard among the base metals rally during 2009 with returns of around 61%. In the coming year, nickel prices are set to perform well.

As long as $15550/15500 holds support, the prices will edge higher towards 21900/22000 levels. Nickel prices are moving in a channel with supports around 16500/15500 range and resistance coming around 26600/26900 zones.

In India, MCX Nickel front December prices are trading around Rs 887 levels. Nickel has been the laggard among the base metals rally during 2009 in India with returns of around 40%. In India the prices may go up to 1030/1035 levels.

In 2010 nickel production is set to increase to 1.44 million tonne. World primary refined nickel production was 1.38 million tonne in 2008, and declined to 1.28 million tonne in 2009.

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