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Nickel soon over $ 30,000 per tonne?
Nickel soon over $ 30,000 per tonne?

21 September 2022 – Asian nickel prices have risen significantly again today. Shortly after the start of trading, LME nickel was already up almost 3%. Since the beginning of the month, the base metal has thus already gained more than 20% on the SHFE and LME. At the same time, stocks on the LME continue to fall. While the question arises what significance the European commodity exchange still has for nickel trading.

Nickel continues to rise – $ 30,000 per ton possible?

Prices have risen significantly again in recent days and weeks. Since 1 September 2022, the most actively traded contract on the SHFE (ni2210, +3.9%) has risen by more than 22% and is currently at around $28,600 per tonne. The LME nickel 3-month contract is up more than 20% as of 20 September. Today, Wednesday, shortly after the start of trading, it was already up about 3%.

Volatile price movements, but no sideways movement

At the beginning of the month, some experts were still saying that the nickel price would move volatile sideways and that stocks on the LME would rise. Looking at today’s stocks on the LME, they have fallen by a further 6% since the beginning of the month.

Price above $30,000 per tonne in the near future?

Therefore, a growing number of voices are lending credence to the prediction that we could see the base metal at well over $ 30,000 in the near future. For nickel, even if one would like to foresee overproduction here, is finite. The Indonesian government recently had to admit this about its own dwindling reserves. And in future it wants to levy an export tax on low-grade nickel products.

What do the expert bodies have to say?

We are curious to see whether expert organisations such as institutes from the sector will be tempted to make reliable statements. Even experts from other producing countries, such as Canada, currently see enormous problems in keeping up with the development of demand for nickel until 2030.

LME loses more and more importance

According to recent media reports, nickel trading volumes on the London Metal Exchange (LME) have continued to decline. According to analysts at Macquire Bank, traded volumes on the LME have plummeted by half since 2012. This was accelerated by the debacle surrounding the Chinese company Tsingshan, which once again led to a significant loss of confidence in the LME. According to current analyses, in August 2022 alone the traded volume fell by 50% compared to the same month of the previous year.

LME still without proposed solutions

The LME apparently wants to react to this with changes. The commodity exchange is apparently still silent on what these changes will look like.

Thorsten Gerber, CEO of the Gerber Group, said today, after laughing out loud at the LME’s statement: “What do you want to do? Do you want to exchange your shareholders?”

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