Nickel price

2022 - 3 - 8

Post cover — Image courtesy of "finews.asia"

Nickel Price Spike Sparks Margin Call Fears (finews.asia)

A sharp surge in nickel prices triggered margin call fears at the London Metal Exchange which suspended trading after prices doubled in hours.

«The current events are unprecedented,» LME said in a notice. «The suspension of the nickel market has created a number of issues for market participants which need to be addressed.» Three-month nickel on the LME more than doubled to over $100,000 a ton yesterday before the LME stepped in to halt trading of the metal.

Carmakers face higher costs and supply issues as price of nickel soars (The Guardian)

London Metal Exchange suspends nickel trading as Russia-Ukraine crisis causes market panic.

The crisis has escalated manufacturer’s issues after a year in which shortages of chips, or semiconductors, hit production. Nickel prices quadrupled in the past week as traders digested the impact of the crisis on metal supplies. The SMMT’s chief executive, Mike Hawes, said: “Russia and Ukraine produce some key raw materials for the European automotive supply chain, including aluminium, palladium and nickel, which is used in battery manufacturing.

Why is nickel up? Dramatic price increase sparks LME trading halt ... (Fast Company)

The base metal's price has skyrocketed with a spike that led the London Metal Exchange to halt trading.

(While Russia also supplies a significant percentage of the world’s aluminum, that metal has seen nowhere near the buying frenzy, and even lost more than 7% Tuesday.) One ING commodities strategist described the nickel market as “absolutely insane” to Reuters: “The fundamentals alone won’t be able to explain these prices.” Another pointed a finger at Tsingshan as a catalyst. Nickel is also historically the most volatile of the metals. But it might’ve been less surprising to somebody watching the evolving Russia-Ukraine conflict, who is also knowledgeable about the geopolitics of metal.

Why has the nickel price trebled since Monday? (MoneyWeek)

The LME has now suspended trading as it tries to restore a bit of order to the market. What's going on? And does it matter for you? Nickel's dizzying ride. The ...

In terms of actual supply of the metal, the classic story with commodities is that high prices cure high prices, as more supply is brought online. You’d calculate this in such a way that moves in one offset moves in the other. Most of those who are “short” nickel aren’t doing it to bet on the nickel price falling. In the stockmarket, investors short sell a stock if they think it is going to fall in value. If the stock does something unexpected – a big buyer comes along, or it reports results or even forecasts that beat expectations – the price might move sharply higher. To do this, they borrow the stock from someone else, sell it in the market, then hope to buy it back later at a lower price.

Top nickel stocks to trade as prices surge to record highs (City Index)

Nickel is just one of the commodities pushing to fresh highs amid the conflict in Ukraine, bringing nickel mining stocks onto the market's radar.

It is also a notable producer of copper and PGMs. Its mining operations are based in the Democratic Republic of Congo and Zambia, but it also has a metals trading arm that is active on a broader scale. Electric vehicle stocks are already grappling with shortages of other key components and semiconductor chips, and we have started to see some hike the prices of their vehicles to counter rising costs. However, we could see the stock slip to as low as $17 and keep the current uptrend alive. The company’s mines are spread across North America, Latin America and Africa, but its biggest nickel operation is located in France. The stock needs to close above here to kick the short-term uptrend into overdrive and bring the HKD1.55 high seen in February 2021 back into play. Hong Kong-listed Jinchuan Group is a China state-owned mining outfit and is the world’s third largest producer of nickel and the fourth biggest miner of cobalt. Buyers managed to push the price to a seven-month high of $21 at the start of this week before it slipped into overbought territory and prompted sellers to start cashing-in profits. Its nickel operations are in Brazil, Canada and Indonesia while its mines with iron ore, also a key ingredient in the steelmaking process, are also in its home country and complimented by plants that produce iron ore pellets in Oman and China. It mined 200,000 tonnes of the stuff in 2021 but only generated around one-fifth of its revenue from the metal as it is also a sizeable producer of other minerals including palladium, platinum, copper, cobalt and gold. Norilsk Nickel accounts for over 8% of global nickel supplies alone based on data from Statista, helping to explain why the price of the metal has surged so much in recent weeks. The conflict has also caused prices of other metals to surge considering Russia is a huge producer of other commodities. Let’s have a look at some of the major publicly-traded nickel producers and how they are performing amid higher nickel prices.

Surging nickel prices are bad news for electric car manufacturers (Quartz)

The rising cost of commodities continues to prove challenging for automakers trying to make EVs more affordable.

Cost or price premium was among the top concerns cited by US buyers regarding EVs in a recent Deloitte survey, after driving range and lack of charging infrastructure. But the upfront cost of EVs tends to be higher than gas-powered vehicles, and makes some potential buyers anxious. Russia is the third largest producer of nickel, a primary component used in the lithium-ion batteries.