MCX Settled Down -1.36% At 572.20

On MCX settled down -1.36% at 572.20 as dollar gained while still sentiments remain firm as support seen from news that about a dozen newly constructed nickel smelters in Indonesia have stopped operations because of a plunge in prices.

Nickel hit a one-year low last week on the London Metal Exchange. The commodity has declined more than 10% this year, but now losses could stabilize as the price collapse has prompted some supply chain changes. Just a few months ago nickel prices were on the high road, but the commodity’s fortunes quickly changed as the Philippines failed to confirm its acting environment minister, Regina Lopez.

Lopez had spearheaded a massive crackdown on the mining industry, forcing the shutdown of mining activities for those companies accused of violating environmental regulations. This mining crackdown was crucial to supporting prices early in the year as another top nickel producer, Indonesia, returned to the market. 

Indonesia had previously banned the export of nickel ores, but the government relaxed these restrictions early in 2017. With the Philippine mining closures behind the rally, once Lopez lost her position nickel prices slid. Now, however; some stability for pricing could be near as many Indonesian nickel smelters have ceased operations.

A recently released report on the nickel market by Fitch Group said that global nickel production will increase in 2017 for the first time since 2013 due to Indonesia relaxing its export ban. World nickel production is expected to grow by an average 3.4% each year until 2021, according to the report. Now technically market is getting support at 566 and below same could see a test of 559.9 level, And resistance is now likely to be seen at 581.2, a move above could see prices testing 590.3.

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Suhani Verma

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