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Nickel Likely To Trade In Range Between 936.4-1002.6

Published 15-05-2018, 11:41 am

Technically Nickel market is getting support at 956.3 and below same could see a test of 936.4 level, And resistance is now likely to be seen at 989.4, a move above could see prices testing 1002.6.

Nickel on MCX settled up 3.04% at 976.30 gained as LMe nickel’s three-month price climbed 2.2% to move firmly above the $14,000-per-tonne support level after the news that staggered mine output across New Caledonia and Indonesia continues to contribute to the metal’s broad consolidation above $14,000 per tonne.

However, total mine output for nickel has risen 9.2% this year from last year, with increased production in China acting as another key component of the metal’s positive supply outlook. The metal’s widening cash/three-month spread is another indication of this, now in a contango of $69 per tonne.

On the trade front, US President Donald Trump tweeted on Sunday that he was working with Chinese President Xi Jinping to help Chinese telecom company ZTE Corp (HK:0763), which had suspended its main operations earlier this month, “get back into business fast”.

The US had imposed a ban on American companies supplying ZTE after the Chinese firm was found to have violated US export restrictions by illegally shipping US goods to Iran. Trump’s remark was seen as a thawing in trade relations between the two countries, ahead of a second round of discussion between the two countries’ top officials over trade disputes in the US capital of Washington DC this week.

The dollar index has eased after hitting as high as 93.42 on May 9, the highest since December 25, 2017. Now traders will be turning their attention to Tuesday’s U.S. retail sales report to try to form a clearer picture of the health of the economy and the outlook for interest rates.

Trading Ideas:
--Nickel trading range for the day is 936.4-1002.6.
--Nickel gained as sentiment improved as downstream consumption for stainless steel rose in the high season and as both Shanghai and LME nickel inventories declined.
--China’s stainless steel output stood at 2.05, 1.88 and 1.97 million mt in January, February and March, while inventories were 2.89, 3.95, and 4.09 million mt, respectively.
--China’s property prices are expected to cool steadily this year amid persistent curbs on buyers and tighter monetary conditions.

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