Technically market is getting support at 1033.1 and below same could see a test of 1011.9 level, And resistance is now likely to be seen at 1066.7, a move above could see prices testing 1079.1.
Nickel on MCX settled up 2.45% at 1054.20 gained on fresh buying tracking firmness from LME nickel which was bid up 2.7 percent to $15,625 as the US dollar came off, LME nickel climbed up overnight.
The SHFE contract also initially surged as longs added their positions. The contract then hovered around the 117,580 yuan/mt level. LME and China’s inventories continued to decline, while Chinese central government’s environmental reviews weighed on production of nickel pig iron (NPI).
In the first half of 2017, nickel was selling for an average price of US$4.43 a pound and there was an increasing glut of nickel in London Metal Exchange warehouses. On Aug. 31, that glut reached a whopping 389,154 tonnes.
Fast-forward to today and it's a totally different picture. Last week, LME nickel stockpiles had shrunk to 278,800 tonnes. The metal also broke through the US$7-a-pound mark last week -- a gain of about $1.50 pound since last December.
Most base metals rose overnight. LME and SHFE nickel led the increases with a gain of over 2%. LME copper touched a low in one week on worries over demand. LME aluminium and tin weakened.
SHFE tin dropped over 1% and aluminium dipped. US PPI rose 0.5% from a month ago in May, more than the expected 0.3%, boosted by a surge in gasoline prices and continued gains in the cost of services.
While key factors to watch today include China’s economic data in May, ECB meeting, US import price index and retail sales growth in May, and US initial jobless claims over the week ended June 9.
--Nickel trading range for the day is 1011.9-1079.1.
--Nickel gained as support came after China said it would ban new capacity for steel, coke and primary aluminium production in some key areas.
--The import window for nickel is not open yet and inventory at bonded warehouses is not going to enter the domestic market.
--Nickel invisible inventory was around 57,142 tons as of now, according to data, down 34.12% year-on-year.
Courtesy: Kedia Commodities