17 May 2024 – Nickel prices on the LME and the Asian SHFE have risen significantly in recent days. In the meantime, the price of the battery and stainless steel raw material has already exceeded USD 21,000 per tonne again. And the ZEW economic expectations for Germany rose in May to their highest level since February 2022.
Nickel prices jump above USD 21,000 mark
Nickel prices have rallied again in recent days and broke through the USD 20,000 mark in after-hours trading on the LME on Thursday. This trend appears to have continued and consolidated overnight, resulting in a renewed rally of more than USD 21,000 per tonne in some cases shortly after the start of trading. Nickel prices on the Asian SHFE have followed their European counterparts, gaining up to 5.2% in value.
Prices with room to rise
On 19 April 2024, following an analysis of LME inventories, we had already anticipated that nickel prices appeared to be undervalued and that inventory trends, which have recently been used as an argument for alleged price weaknesses, were being misinterpreted by the same sources.
What is currently affecting prices?
Various factors are currently influencing nickel prices. Firstly, the scarce availability of Indonesian nickel ore and the extended US and UK sanctions against Russian raw material exports (in combination with a sales ban on the LME and CME).
Added to this is the significant downward correction in expected nickel production by the INSG while demand for the important stainless steel and EV battery raw material remains robust. There was also speculation back in April that the Chinese government could build up state stocks due to a possible nickel shortage.
New Caledonia shaken by serious unrest
The serious unrest in New Caledonia over the last few days, which according to the media is already taking on civil war-like proportions and has some origins in the mining industry there, is likely to have had a further impact on prices.
ZEW survey: economic optimism on the rise
The ZEW Economic Sentiment Indicator for Germany rose from 42.9 points in the previous month to 47.1 points in May, its highest level since February 2022. This is the tenth consecutive month in which confidence among financial experts has increased, which can be attributed to signs of economic recovery in Germany. The index for the eurozone has improved steadily since February and reached 47 points in May, an increase of 3.1 points since the survey in April.
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Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.
