MCX Nickel under long liquidation; Support seen at 994.6
Commodity Online | December 02 2019
UPDATED 10:00:41 IST

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Technically Nickel market is under long liquidation as market has witnessed drop in open interest by 5.14% to settled at 1329 while prices down 21.2 rupees.

Now MCX Nickel is getting support at 994.6 and below same could see a test of 983.6 levels, and resistance is now likely to be seen at 1023.1, a move above could see prices testing 1040.6.

Nickel on MCX settled down 2.06% at 1005.5 on concerns over slowing Chinese demand. Prices come under pressure from worries about demand from stainless steel mills, mostly located in China, which account for roughly two thirds of consumption estimated at about 2.4 million tonnes this year.

However, historically low inventories, at less than 70,000 tonnes, in LME-registered warehouses as well as cancelled warrants – metal earmarked for delivery – at nearly 34% of total stocks are expected to support prices. Nickel ore inventories across all Chinese ports rose this week for a second straight week, showed data. The port inventories increased 150,000 wmt from a week earlier to 14.9 million wmt as of November 29.

Stocks in metal content gained 1,400 mt to 127,000 mt. During the same period, stocks across seven major Chinese ports climbed 100,000 wmt to 11.58 million wmt. Inventories of refined nickel in the Shanghai bonded areas stood at 16,700 mt as of November 29, rose slightly by 400 mt from a week ago, data showed. The import arbitrage window has kept closed since last week.

Among the total stocks, nickel briquettes accounted for 3,900 mt, flat from a week earlier. The bonded inventories unlikely to build up significantly in the short term as sluggish domestic demand weighed on orders for overseas nickel cathode. China’s imports of unwrought, non-alloyed nickel continued to slip in October after them more than halved on the month in September amid import losses.

Trading Ideas:
--Nickel trading range for the day is 983.6-1040.6.
--Nickel prices ended with losses on concerns over slowing Chinese demand.
--Prices come under pressure from worries about demand from stainless steel mills, mostly located in China.
--Nickel ore inventories across all Chinese ports rose this week for a second straight week, showed data.

Courtesy: Kedia Commodities

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