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Below is quote on Nickel under pressure By Mr. Yash Sawant, Research Associate, Angel One Ltd.

Nickel under pressure

In September’21, Nickel prices slipped about 6 percent on the LME whereas prices on the MCX ended lower by 1.2 percent.

Nickel prices rose earlier in the month as booming demand from the stainless-steel segment following the resumption in global economic activities and expansion in the EV sector.

Along with increased stainless-steel production, depleting inventories across exchanges hinted towards potential tightness in the global Nickel market.

However, Nickel and other industrial metal prices remain under pressure in the latter half of the month following the increased energy usage limitations in China. Power consumption norms in the major metal consuming nation ignited fears of restricted supply, suppressed demand and slowdown in China’s economic recovery.

Imposition of restrictions began in March’21 when Chinese officials ordered some of the energy intensive industries in Inner Magnolia to limit the usage in order to curb the carbon emission levels. Limitations were later imposed in many prime producing regions like Yunan which raised worries of potential shortage in the global markets. China’s industrial sector which was already under pressure due to the spike in raw material prices was further hampered following the increasing restrictions. Weakening demand from China and expectation of further tightening of the energy consumption norms outpaced all the supportive factors and pushed most of the base metal prices lower.

Also, US FED Chair Jerome Powell indicating towards a sooner than expected withdrawal of the expansionary policy given the steady recovery in US economy further clouded the outlook for base metals.’

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