Scrap Metal Prices

Nickel gained as the demand for stainless steel is expected to have bottomed out. There is plenty of spare nickel capacity and new supplies are also expected to start if the prices stay near the current levels. China holds more than 100,000t of commercial nickel stocks, according to the state-controlled research agency, Antaike. It is expected that nickel market may show a surplus of 91,000 tonnes in 2009, which could largely be worked off by the end of 2010. But with plenty of spare idled capacity available, the price will be as much a hostage to supplier responses as to the size and rapidity of the global economic recovery.

The LME warehouse stocks though have declined this month but are still at much higher levels as compared to previous years which may provide hindrance to the rise in prices in the coming months. Nickel has formed complete V pattern last month. It formed a high of Rs794/kg in the beginning of the month, but failed to sustain at higher levels as was not able to surpass the resistance of Rs800/kg, thus relegated to lower levels of around Rs702.20/kg from where it has bounced back swiftly.

It is still facing crucial resistance at $16600/t in LME and Rs795-800/kg in MCX. The trend is quite favorable for bulls at present and once the level is taken out convincingly, one can expect it to traverse an upward journey and even form new highs of this year initially of around Rs850/kg and then Rs940/kg, otherwise some consolidation might be seen.

courtesy: www.commodityonline.com