MCX Nickel settled down 1.94% at 1011.1 on profit booking after prices gained amid an Indonesian mining ministry official reiterating that a ban on the export of raw ore exports would be enforced by 2022.
Headline stocks in LME-registered warehouses, at 147,942 tonnes, have slid from more than 450,000 tonnes in 2016 and are the lowest in 6-1/2 years. Adding to worries over supply, between 50% and 79% of LME nickel warrants are held by one entity. Cash nickel is still trading at a discount to the three-month contract on the LME, however, suggesting that while the market has tightened, metal is still available.
MCX Nickel Trading Tips support level @ 942 and below same could see a test of 922 level, and resistance is now likely to be seen at 1025, a move above could see prices testing 1066.
Inventories of refined nickel in the Shanghai bonded areas rose this week, as wider losses on imports deterred outflows to domestic markets and as shipments that were delivered when the arbitrage window was open, arrived. Data showed that stocks gained 4,000 mt, or 28.6% from a week ago to stand at 18,000 mt as of Friday July 19.
Nickel inventories across LME warehouses almost halved from May 2018 to stand at 148,200 mt as of July 18, data from the bourse showed. The optimism across the industrial chain, spurred by the nickel rally, will shore up the market in the short run.
A recent hike in purchasing prices of ferronickel and procurement volumes of spot nickel by major Chinese stainless steel mills grew momentum in nickel prices.