Nickel highlights

摘要

There were a number of fresh forces acting on nickel prices last week, but the net effect was further consolidation. For the nickel bulls, the medium-term upward trend on the technical charts remains intact, so there is still the expectation that price gains will resume in time. In addition, Chinese manufacturing data was supportive, as was sentiment towards US monetary policy in light of comments from the Fed on the outlook for interest rates. Reminders of nickel bulls' need for caution in the short term were plentiful too, however, with premiums softening and LME stocks rising. Meanwhile, INSG data released in mid-June worked both ways as the group showed a market still in over-supply, but suggested the surplus is a narrowing, so the trend is in the right direction. Overall, nickel is still in consolidation mode, and rightly so after such a fast move earlier this year. We reiterate our view that the fundamentals now need to catch up to these higher price levels, and evidence of that realignment should become visible in the second half of the year.