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Nickel futures continue to rise
Nickel futures continue to rise

22 August 2022 – The US stock market is up 15% since mid-June despite challenges in the capital markets. And nickel futures in Asia are up more than 5% in some cases today. Indonesian nickel tax and concerns about shortages in raw material reserves drive price.

US stock market, up about 15% since mid-June

Even though investors may currently perceive the situation on the capital markets and in the US economy as contradictory, according to analyses by Deutsche Bank, the US stock market is up about 15% since mid-June.

US economy should continue to grow

A model of the Fed in Atlanta assumes that the US economy will grow by 1.6% in the third quarter compared to the previous year. Further signs of economic stabilization could give the stock market a boost in the short term. The recovery of the US stock market, which has been ongoing for a good two months, could continue against the backdrop of stabilizing growth, falling real yields and declining consumer price inflation rates, according to Deutsche Bank.

Nickel futures continue to rise

Nickel futures on the Asian Commodity Exchange SHFE rose again on Monday. Individual contracts went up by more than 5%. The most frequently traded nickel contract Ni2209 rose by more than 4.5%. This puts the contract more than 30% above its September 2021 level, indicating a steady rise in nickel prices despite some volatility.

Indonesia wants to keep raw material in the country

With its planned nickel tax, the Indonesian government is currently contributing to a further increase in the price of the important raw material for stainless steel and EV batteries.

Government concerned about reserves

The government is concerned that the country’s nickel reserves could otherwise be depleted too quickly. Especially while the price is still quite low, and the true value cannot be realized when the demand for electric vehicles, batteries, and other alternative forms of energy increases in the future. For this reason, Indonesia also wants to limit the number of smelters licensed.

Known reserves are limited

The world’s known nickel reserves are finite, mining is becoming increasingly difficult, and the quality of the ores continues to decline.

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