Nickel, Virus, RG and price31 Jan 2020 12:29
Obviously base metals have taken a hit over virus due to slowing industrial output as a direct result, how much depends on how long this takes to control and how many it infects/kills in the meantime. Share prices of shares directly correlated to base metals feeling a risk off attitude. Bright spark might be Chinese throw money at economy post virus to catch back up for lost time and output etc. Despite the virus in the background and the sell off of base metals they will find a base that its just too good to not buy at that point, remember futures are 3 months contracts, so maybe you buy future Nickel contracts now at a depressed price because you think this will all have come and gone by then. To top that Indonesian ore is no longer available so price bottom more likely to appear as stock pool is lower. I read earlier that Chinese imports of Indonesian Nickel was up 73% last year, the end of year price spike might have been rushing that extra demand through and that extra imported amount is going to have to be used up before price pressure comes back to Nickel on the rest of world market, this is likely delayed now with the virus. Probably mid year as stock starts to thin and open market demand starts to push up Nickel again.
However until I see the virus numbers stabilise this is a risky time, the markets don't seem to be overly too concerned strangely, even algos buying the WHO saying it was an international emergency.....weird. It will blow over end of the winter into spring as all viruses do and the have a year to get vacinne sorted. Just how bad will it get inbetween.
With all of this our nemisis RG continues to sell perhaps pulling in stop loses and easily spooked.....traders quick to move on too, all putting pressure on the share price. Can value buyers keep on top of the sells in this support zone? Who knows.