Technically Nickel market is under long liquidation as market has witnessed drop in open interest by 16.96% to settled at 1625 while prices down 10.5 rupees.
Now MCX Nickel is getting support at 1469.1 and below same could see a test of 1454.9 levels, and resistance is now likely to be seen at 1508.9, a move above could see prices testing 1534.5.
Nickel yesterday settled down by 0.7% at 1483.2 on profit booking after prices rose as supply worries deepened on the back of Chinese power shortages and rising electricity costs in Europe amid falling inventory levels of the metal.
Widespread power shortages in China and higher electricity prices in Europe have dampened production in some sectors of those economies. Kosovo’s sole ferro-nickel producer Newco Ferronikeli said it was shutting down production because of the increase in energy prices.
In China, there were concerns that nickel smelters will be forced to curtail output amid power shortages, and a hike in electricity prices is expected to dent margins for many producers, potentially reducing supply. LME nickel inventories fell to 149,412 tonnes, their lowest since December 2019.
ShFE stocks were last at 6,422 tonnes, hovering near a record low of 4,455 tonnes. On the fundamentals, domestic nickel ore inventory has been rose slowly, and the supply of raw materials remained tight. Meanwhile, the ferronickel plants were also affected by the power rationing.
The tight supply of ferronickel have boosted the demand for nickel plate as an alternative. The output in October is likely to stay stable though the downstream production has been dragged down by production reduction policies.
Trading Ideas:
–Nickel trading range for the day is 1454.9-1534.5.
–Nickel dropped on profit booking after prices rose as supply worries deepened on the back of Chinese power shortages.
–Widespread power shortages in China and higher electricity prices in Europe have dampened production in some sectors of those economies.
–Citi lowers nickel 0-3 month target to $17,000/t, with $18,300/t average for 4Q’21.
Courtesy: Kedia Commodities
Source: Comodity Online
