Nickel dropped as LME nickel ended 2.3 percent lower at $9,700 amid expectations of higher supplies and rising stocks in LME approved warehouses. It is Indonesia’s decision to ease its export ban that serves the main culprit for the decline. Indonesia finally introduced new rules on January 12 that the country will allow exports of nickel ore under certain conditions. It was heard since September 2016 that the country proposed to revise its ban. In accordance with the new regulations, nickel miners should dedicate 30 percent of their smelter capacity to process low-grade ore, and the remaining low-grade ore will be allowed to be exported. Global nickel market ended in deficit of 84,600 tonnes in January-November 2016 with apparent demand exceeding production. The calculated full year surplus had stood at 73.5 kt during the whole year 2015, according to WBMS. The statistics indicate that that reported stockpiles maintained by LME were 74.3 kt lower at the end of November last year from the closing levels of 2015. World Nickel mine production was 1,784.8 kt in January-November 2016, lower by 166.0 kt when compared with the corresponding period during previous year. The ban on exports by Indonesian administration has led to reduced mine output from the country. In addition, the local mine production from the country has continued to remain extremely weak ever since the beginning of 2014. Refined Nickel production in Jan-November ’16 was 1,648.6 kt. The Chinese smelter/refinery production during the initial eleven-month period of the year witnessed decline of 37.0 kt compared to 2015. Technically now Nickel is getting support at 649.9 and below same could see a test of 641 level, And resistance is now likely to be seen at 672.9, a move above could see prices testing 687.

Trading Ideas:

Nickel trading range for the day is 641-687.

Nickel dropped as LME nickel ended 2.3% lower amid expectations of higher supplies and rising stocks in LME approved warehouses.

Global nickel market ended in deficit of 84,600 tonnes in January-November 2016 with apparent demand exceeding production.

Mine production in the Philippines was steady at 24,700 tonnes, the same as in October after nearly halving from 47,300 tonnes in September.