Industrial metals are the worst performing class of commodities at the beginning of a new week. Sentiment towards base metals deteriorated following a release of monthly activity data from China for October. Industrial production and retail sales turned out to be better-than-expected while urban investments disappointed. However, details in the report were quite disturbing. Daily steel output in October 2021 was the lowest since December 2017. Moreover, steel output has erased all the gains from the beginning of the year and was 0.8% year-to-date lower after October. Another worrying sign was a 17% drop in cement output, which is an important indicator for construction activity in the world's second largest economy.
All industrial metals trade lower but NICKEL is among those taking the biggest hit. Taking a look at the chart we can see that price managed to halt downward move at the beginning of November near the 38.2% retracement of recent upward impulse.However, after a brief run higher, advance was halted at the 23.6% retracement and now NICKEL is once again testing the lower limit of the upward channel. While a break below the lower limit of the channel could make the outlook somewhat more bearish, it should be noted that the main support is marked with the lower limit of the local market geometry near the 50% retracement (18,500 area).
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Source: xStation5
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