New nickel benchmark price found Stainless Espresso 1200x630 1

2 June 2023 – Is there a new benchmark price for nickel? It seems so, at least according to one of the world’s largest ferronickel producers. Positive signals from China and the United States are pushing up base metal prices in Asia.

New nickel benchmark price found? 

Until the beginning of 2022, the spot price on the LME was considered the benchmark value for nickel. With the shorting fiasco, a short-term price above $100,000/MT, the non-transparent processing and a massive loss of confidence on the part of LME customers towards the commodity exchange, the demand for a valid and reliable benchmark price had become loud. 

Ferronickel producers rely on new benchmark price

Now this seems to have become reality, as reported by Bloomberg. According to one of the world’s largest ferronickel producers, Eramet, the ferronickel industry has turned away from the LME and towards Asia. It now uses the Shanghai Metal Market Nickel Index as the basis for pricing ferronickel, which is so important for European stainless steel production, for example. Spot prices in Asia are currently about 15% higher than on the LME.

Base metals rise after positive signals from China and the United States 

After industrial activity in China surprisingly increased significantly in May, the markets promptly reacted to the positive impulses. On Thursday, some base metal prices, e.g. copper, had already risen by about 1.2%.

Today, the positive development continued on the SHFE and other Asian commodity exchanges. Copper up by +1.5% , Nickel Futures +4% , Stainless Steel Futures +2%, Iron Ore +2.9%, Hot Rolled Coil +2.68%, Coke Coal +3.78% and Aluminium by +1.7%. 

US Congress and Senate confirm agreement in US debt dispute 

This is also mixed with expectations that the U.S. Federal Reserve will not raise interest rates this month and that the agreement on raising the U.S. debt ceiling has been confirmed by Congress and the Senate. 

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