Nickel on MCX settled down -0.13% at 678 tracking weakness from LME nickel prices which eased 0.8 percent on the possibility that the Philippines’ hardline environmental minister may not be confirmed by Congress, opening the door to a new minister who may be more permissive of the mining sector. But Regina Lopez said on Thursday that President Rodrigo Duterte would reappoint her if a decision is delayed, giving her more time to press her case on mine closures.
Pressure also seen after the Domestic stainless steel prices in China have fallen over the past week on thin trading and a softening nickel market. Key economic data out already shows Chinese CPI at 0.8%, down from 2.5%, but the weaker figure has been blamed on the Chinese Lunar New Year holiday, while PPI climbed 7.8% after 6.9% in January.
Meanwhile the correction in the base metals continues, risk off seems to be underway ahead of next week’s FOMC meeting but large stock moves in copper and nickel and further uncertainty over Philippine and Indonesian mining and export policies are adding to the risk-off move, while recent lack of upside progress also seems to be prompting stale long liquidation.
Key now will be how much buying steps off the sidelines to take advantage of the weaker prices, which coming just ahead of the seasonally stronger second quarter may be a welcome opportunity for consumers. The correction in the metals also seems to be driven by the increasing chance of a US interest rate rise next week, which a few weeks ago was a 50:50 risk, but is now much higher. Technically market is getting support at 671.9 and below same could see a test of 665.8 level, And resistance is now likely to be seen at 683.7, a move above could see prices testing 689.4.