Nickel on MCX settled up 0.52% at 714.50 on short-covering as support seen after the update that supply deficit last year of 209,000 metric tons, according to Bloomberg, and is projected to remain in deficit this year to the tune of 188,000 mt. Deficit or not, the market does not seem to be in short supply yet. Between Indonesia and the Philippines the two countries produced about 700,000 metric tons of nickel a year in 2014 and 2015, with about 170,000 mt of that coming from Indonesia due to the export ban. The Philippines has just ordered the closure of 21 mines and the suspension of another six. The island chain is a source of around half of the country’s nickel output. After Indonesia’s 2014 export ban, the Philippines became the world’s largest exporter of nickel ore and the primary supplier to China’s massive nickel-pig iron industry, raw material for the alloying of stainless steel. Also Chinese buyers simply switched to the Philippines as supplies dried up from Indonesia and drew down on extensive stocks they had amassed in advance of the export ban. Just as the Philippines’ new firebrand environment and natural resources secretary, Regina Lopez, moved to close environmentally damaging open pit mines, Indonesia is increasing exports again. Investors have their eye on a probable surplus towards the end of the decade as both countries return to some level of consistent supply. In the week ahead, the U. S., the UK and China are to release what will be closely watched data on inflation. Meanwhile, Fed Chair Janet Yellen is due to testify to Congress for the first time since Donald Trump entered the White House. Technically market is getting support at 710.8 and below same could see a test of 707.2 level, And resistance is now likely to be seen at 719.8, a move above could see prices testing 725.2.

Trading Ideas:

# Nickel trading range for the day is 707.2-725.2.

# Nickel gained on short-covering as support seen after the update that supply deficit last year of 209,000 metric tons

# Philippine President Duterte said he would not stand in the way of his minister's decision to close several mines.

# Duterte's support of Lopez's latest action suggests miners may be forced to go to courts to overturn her ruling.