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MCX Nickel under fresh buying; Support seen at 1232.4
Commodity Online | September 20 2019
UPDATED 10:00:34 IST

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Technically Nickel market is under fresh buying as market has witnessed gain in open interest by 7.73% to settled at 10406 while prices up 22.1 rupees.

Now MCX Nickel is getting support at 1232.4 and below same could see a test of 1215.3 levels, and resistance is now likely to be seen at 1259.3, a move above could see prices testing 1269.1.

Nickel on MCX settled up 1.8% at 1249.6 as Indonesian miners rushed to ship nickel ore before the export ban goes into effect from January. The premium for cash nickel over the three-month contract ended at $105 a tonne after flaring out to $150, near the $163 hit last week, its highest since April 2009.

The rise was because of nervousness about availability of the steelmaking ingredient on the LME market owing to one company holding large numbers of warrants and falling stocks in LME-approved warehouses. Most Indonesian medium- and high-grade nickel ore suppliers raised their quotes to $45-47/wmt on a fob basis, with some offers hitting a high of $51/wmt.

Transactions were done at a maximum of $45/wmt fob, up $2/wmt from a week earlier, but trades to China on a cif basis did not rise this week after substantial gains last week. Buyers from north China purchased nickel ore with 1.8% Ni at $72-73/wmt cif last week. The trading level was up some $7/wmt, or close to 10% from the prior week.

Production of refined nickel in China came in at 12,670 mt in August, up 0.56% from July and 11.36% from August 2018. A smelter in Gansu put its one production line under maintenance for about a month ending at the middle of August. This impacted production by some 1,000 mt. Nickel production is expected to rise to 14,000 mt in September, as greater profit margins encourage smelters to shift from nickel sulphate production to nickel metal after nickel prices soared.

Trading Ideas:
--Nickel trading range for the day is 1215.3-1269.1.
--Nickel prices gained as Indonesian miners rushed to ship nickel ore before the export ban goes into effect from January.
--The premium for cash nickel over the three-month contract ended at $105 a tonne after flaring out to $150, near the $163 hit last week, its highest since April 2009.
--The rise was because of nervousness about availability of the steelmaking ingredient on the LME market owing to one company holding large numbers of warrants.

Courtesy: Kedia Commodities

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