Nickel hits US$100,000 per tonne, LME suspends markets

Published 10-MAR-2022 11:25 A.M.

2 min read

Read the full article here: LME forced to halt nickel trading, cancel deals, after prices top $100,000

Earlier this week we saw what we think is a genuine once in a lifetime move in the nickel price, with the commodity reaching ~US$100,000 per tonne – well above its previous all time highs of ~US$50,000 per tonne.

We have been pretty vocal about the impending shortage of raw materials that will power the electric vehicle revolution. We also knew of the current nickel supply/demand imbalance (nickel is an essential EV battery ingredient). But we don’t think anyone could have forecasted a move this big in such a short period of time.

The move by the LME (London Metals Exchange) to halt trading looks to have come off the back of a large short position taken out by a Chinese company, that is facing losses >US$12 billion.

We think there is more to play out with the nickel price and don’t think that the US$12 billion margin call will be resolved in a day or two with the halt on the LME likely to take a while to sort out.

Though it was great to see the nickel price reaching these levels, we are invested in our nickel stocks because of longer term structural changes to the supply/demand equation for the critical battery metal.

Below is a list of all of our investments with exposure to nickel.

Kuniko (ASX:KNI) - why we invested