MCX Nickel under short covering; Support seen at 942.3

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MCX Zinc under short covering; Resistance seen at 195.9

Technically Nickel market is under short covering as market has witnessed drop in by 1.95% to settled at 10155 while prices up 19.1 rupees.

Now MCX Nickel is getting support at 942.3 and below same could see a test of 919.6 , and resistance is now likely to be seen at 985.6, a move above could see prices testing 1006.2.

Nickel on MCX settled up 2.02% at 965 as prices continued its rallied on concerns that top producer will resume an export ban on ore in 2022.

Indonesia, which has large nickel laterite ore reserves used to make nickel pig iron for the stainless steel industry, relaxed a ban to export nickel ore in 2017, but said at the time exports of unprocessed ore will be restricted again in 2022.

Nickel pig iron is expected to replace nickel ore as major raw material exported from Indonesia to China, for nickel and stainless steel production, as Indonesia reiterated that will stop raw ore exports in 2022.Chinese producers of NPI and stainless nickel that only have plants in China are likely to prefer nickel ore from the .

Indonesia is expected to follow through its plan to ban on raw mineral exports in 2022, as it expects to have adequate smelting facilities by then. China imported 44.47 million mt of nickel ore in 2018, with 14.16 million mt from Indonesia and 28.19 million mt from the Philippines, according to China Customs data.

Data from the ministry showed that there will be 41 smelters in operation in 2022, including 22 nickel smelters. Currently, there are seven smelters in operation in Indonesia, with NPI capacity of 322,200 mt in Ni content on an annualised basis. Indonesian capacity is likely to expand to 656,252 mt in Ni content by 2022. 

Trading Ideas:
–Nickel trading range for the day is 919.6-1006.2.
–Nickel prices continued its rallied on concerns that top producer Indonesia will resume an export ban on ore in 2022.
–Nickel pig iron is expected to replace nickel ore as major raw material exported from Indonesia to China.
–China imported 44.47 million mt of nickel ore in 2018, with 14.16 million mt from Indonesia and 28.19 million mt from the Philippines.

Courtesy: Kedia Commodities

Source: Commodityonline.com