November 2019 | Base Metals
Nickel: Getting oversold
The break down through the base of what could have been a potential bull flag formation was technically significant for nickel prices last week and is a strong indication that sellers have the upper hand. Nickel prices are now undergoing deep technical consolidation, with the 200-day moving average the key focus in the short term as it is an area where bargain-hunting could emerge again.
Prices broke lower as expected In last week’s nickel analysis we noted plenty of reasons to encourage further selling in nickel prices, including (1) frustration over the lack of progress of US-China trade talks, (2) clearance by Indonesian authorities of miners to resume ore shipments and support for the fast-track construction of battery chemical production capacity, (3) strong Chinese NPI production, (4) margin pressure on stainless steel producers bringing production cuts closer, (5) enduring weakness in EV sales in the key Chinese market, and (6) the realization that the global nickel market is moving back to balance after four straight deficit years. At least this time last...
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