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Below the Quote on Nickel`s Comeback on MCX: What Happened & What`s Ahead by Anindya Banerjee, Head Commodity and Currency, Kotak Securities

after a three-year pause following the dramatic LME short squeeze of 2022. With the relaunch, traders and investors get another chance to participate in one of the most strategic and volatile base metals. Sharing below insights by Anindya Banerjee, Head Commodity and Currency, Kotak Securities.

Here’s the big picture 

Market Backdrop

* 2024: Prices ended ~8% lower on oversupply & weak stainless demand.

* 2025 so far: A brief rally in March fizzled out; prices slipped another 8%.

* Global balance: Production (3.73 mn tonnes) > consumption (3.53 mn tonnes) → third straight surplus year.

Key Global Drivers

* Indonesia: Swing producer (2/3 of global output). Possible quota tightening, stricter approvals, and higher royalties.

* Philippines: Solid no.2 supplier, keeping market flows steady.

* Russia: Norilsk under sanction overhang; circumvention risk in focus.

* China: Expanding state reserves for supply security; stainless + EV restocking could cushion downside.

* Macro: Fed’s rate path, USD trend, and global growth outlook remain crucial.

MCX Contract Highlights

* Symbol/Description: NICKEL / NICKELMMYYYY

* Launch: August 18, 2025

* Lot Size: 250 kg

* Quote/Base: Rs/kg (ex-warehouse; GST extra)

* Tick Value: Re1 = Rs250 per lot; 10p = Rs25

* Margin: ~10% (subject to exchange updates)

* Delivery: Compulsory; unit 1,500 kg ±10%; Thane delivery center

Illustrative Margin & P&L:

* Ref price Rs1,350/kg = Rs337,500 notional/lot

* Margin ≈ Rs33,750 per lot

* Re1 move = Rs250; Rs10 move = Rs2,500 per lot

Technical & Macro Signals to Watch

* Prices forming a base between Rs.1280–1360/kg.

* Breakout above Rs.1360 opens target toward March highs of Rs.1450

* Since 2023, Nickel USD prices have tracked the Russian Rouble.

* A sharp Rouble rally in 2025 could be a harbinger of upside in Nickel.

Takeaway

Nickel’s return to MCX offers new opportunities in a strategically critical metal. The contract’s design, compulsory delivery, and moderate margins make it attractive for hedgers and active traders alike.

Key triggers ahead include Indonesia’s quota policy, China’s stockpiling cadence, Russian supply dynamics, and global macroeconomic cues.

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