According to an analyst at Vadilal Industries, Satish Khandelwal, nickel prices which were ruling near 6,500 level in October 1997, declined to 4,000 in October 1998.

Even though, the metal is being sold below the landed prices, most of the players mint good money, as they had covered the metal at lower level and sell at higher levels.

Prices bounced to 4,700 in mid-January but fell back to 4,200, then shot up to 5,500 in February. Prices gave up the all- gain in just three days and fell to 4700, the fall though heavy but allowed many importers to cover for their demand who missed the bus. He said that the domestic players lost heavily two years ago, however this time they could make a fast buck as they were long since 6800 level crossed in the last July-August. Pricesrecorded more then 170 per cent gain from the low of $3800 seen in last March. It is worth noting that the country imports around 20,000 tonnes of nickel per annum. While the rally brought cheer to the nickel importers and traders, it badly affected the manufacturers of stainless steel utensils, which were already facing troubles from the risings input prices and slack demand.

Raw material cost especially of furnace oil and nickel shot up through the roof since last few month. Steel prices also started rising.

Three- month nickel futures soared to $ 8,300 per tonne at the London Metal Exchange-LME. The futures hovered around 8,100 on last Friday. Having tested the key level at $6,700 in the last month, prices spurted to $8,300 a tonne, a four-year high.

Although prices recorded smart recovery, market is seen sluggish, as all the momentum indicators like 14-day RSI, 10-day ROC and stockist are indicating highly over-bought conditions, a technical correction is impending.

Prices are likely to fall andmay test 7,400, which seems a good support. 8,300 level seen a strong resistance. While the technicals seen bearish, fundamental seen relatively good. However keeping more then 150 per cent rise, all the bullish factors like Y2K worries, possible supply disruption and Norisk nickel and strike at largest mine INCO seems factors in the prevailing prices.

Hedge funds entered in the long positions anticipating demand outstrip supply. Winter in Russia is more harsh this year, it is believed. Hence Arctic shipping lines would be closed for some time. Substantial supply came from Norisk, which is one of the largest producers.