LME nickel stocks artificially high?
LME nickel stocks artificially high?

4 June 2024 – The allegedly rising nickel stocks on the British commodity exchange LME are often used as an argument for the alleged abundance of nickel. But where do the almost 30% of the LME’s current on-warrant stocks actually come from?

LME nickel stocks kept artificially high?

Nickel stocks on the LME commodity exchange are often used to point to allegedly rising stocks of class 1 nickel.

Russian nickel: 30% share of LME on-warrant stocks

However, a closer look at the LME nickel stocks based on the origins of the various commodities clearly shows that a large share of almost 25,000 MT of class 1 nickel originating from Russia, which has not changed for months, is keeping the actual stocks on the LME artificially high. The Russian share of total LME stocks in this area is therefore almost 30%.

Russian nickel stocks almost unsaleable?

With the new sanctions from April 2024, the US government imposed a de facto ban on trading Russian nickel on the LME and the US commodity exchange CME. This Russian nickel, regardless of whether it was produced before the deadline or not, is likely to have become virtually unsaleable and therefore worthless with the new sanctions.Dead stones in sacks that only serve to artificially inflate stocks.

End of the supply distortions not yet in sight

The upheavals in the rest of the nickel market, be it the unrest in New Caledonia or the problems of the Indonesian government in awarding new mining licenses or the record-breaking imports of Philippine nickel ore to Indonesia, are likely to explain the significant price jumps in this important battery and stainless steel raw material. And Class 1 nickel from Indonesia continues to be sought in vain in the LME’s stocks.

Long-established experts without answers

It is therefore all the more important to emphasize once again that when it comes to the pricing of commodities, we should not rely solely on one or two long-established experts who are still trying to sell us an oversupply of nickel. Moreover, most of them are not in a position to honestly admit that they have made mistakes in their forecasts. These experts have been blatantly wrong more than once in recent years and have simply left out important information.

So our tip to our readers: always get your information from more than one source and ask yourself the right questions.

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