London Metal Exchange (LME) three-month nickel hit a seven-year high of $20,225 per tonne on Thursday morning and has a new-found spring in its step after collapsing in February.
That is when Chinese steel group Tsingshan announced its Indonesian nickel operations would supply matte - a form of the metal used only for stainless steel production - to battery makers. That undercut a collective bet that only refined nickel would be sufficiently high grade for the electric vehicle sector.
Bull spirits were rudely doused and nickel was the under-performer of the LME base metal pack until June, but has now clawed back all of its losses and a little bit more.
LME time-spreads have shifted to backwardation and registered inventory is flying out the warehouse door.
The metal is almost certainly heading to China, where a short squeeze is playing out on the Shanghai Futures Exchange (ShFE).
China is also looking physically short of nickel, with imports booming across the product spectrum. A market that has been obsessed by supply has been caught out by the strength of demand.
Prices of nearby nickel contract leap to high premium over the further month
Production of LME deliverable KAS-branded aluminium at Kazakhstan’s Eurasian Resources Group has reached the four-million-tonnes milestone
