Multi Commodity Exchange Nickel has outperformed the broader commodities in metals space this December. Nickel is used extensively in producing austenitic steel grades. Apart from this Nickel is also used in rechargeable batteries. Electrical resistant alloys are also made with the usage of Nickel.
Though the uses are multiple, the demand for these products was in question. Steel and other alloys have been away from limelight on falling demand. Domestic steel demand dipped by 2.8% in first half of the year.
The world steel major Arcelor Mittal has already reduced its outlook on steel shipments in fourth quarter of 2011. The company said that the uncertainties in global environment have shaken the confidence of customers therefore in the fourth quarter it will be both volume and price pressures.
Despite the falling steel and steel products outlook, the Nickel performance for a brief period in December has been good. The domestic Nickel prices on 20 Dec 2011 tested a levels of Rs. 1004 per kg on MCX, that ensured the returns of 15% since 30 Nov 2011 when prices tested a multi month low of Rs. 889 per kg.
Going by the charts it seems that if supports of Rs. 991-988 per kg are not broken Nickel has a potential to test Rs. 1020 per kg soon. A word of caution though that the speculation will be higher in Nickel and volumes might dip as we near Christmas and New Year.
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