Technically Nickel market is under short covering as market has witnessed drop in open interest by 3.69% to settled at 1696 while prices up 1.8 rupees.
Now MCX Nickel is getting support at 1397.9 and below same could see a test of 1387.3 levels, and resistance is now likely to be seen at 1417, a move above could see prices testing 1425.5.
Nickel yesterday settled up by 0.13% at 1408.4 as Brazilian mining giant Vale reported that it has started the process to halt the activities at its Onça Puma nickel mine following the notification of the suspension of the operation license by the Environmental and Sustainability office of the Pará State (SEMAS), allegedly due to no compliance with conditions for licensing.
The company said it is in contact with SEMAS to understand the technical and legal grounds for the determination. Vale added it is also taking the appropriate administrative and judicial measures to reverse the order to suspend mine operations, which it considers unfounded.
However upside seen limited amid easing tightness in nearby inventories as the difference between LME cash nickel and the three-month contract flipped to a discount of $1 a tonne after staying in premium since Aug. 25. The Commerce Department said that factory orders increased 1.2% in August.
Data for July was revised higher to show orders rising 0.7% in July instead of gaining 0.4% as previously reported. The difference between LME cash nickel and the three-month contract flipped to a discount of $1 a tonne after staying in premium since Aug. 25, indicating easing tightness in nearby inventories.
--Nickel trading range for the day is 1387.3-1425.5.
--Nickel remained supported as Vale halting output at its Onça Puma operation in Brazil.
--However upside seen limited amid easing tightness in nearby inventories.
--Worries over defaults at Chinese property developers and the potential impact on metals demand grew, amid fresh credit rating downgrades.
Courtesy: Kedia Commodities