The price of the metal initially soared on supply concerns earlier in the week, before correcting course on Wednesday and falling just as quickly, while remaining in a good price average.
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Nickel prices fell 4.8% this week on the London Metal Exchange (LME) after surging earlier this week on false reports of a fire at an Indonesian factory, threatening supply. Added to this was the concern of the London market following a dispatch from the Bloomberg agency evoking “a leak in a waste dam in Goro, New Caledonia.”
On Tuesday, nickel crossed the $30,000 per ton mark, peaking at $31,275, its highest since May.
Russia
The LME announced last week its decision not to ban Norilsk metals from Russia. Thus, the metal exchange “recognizes that stocks of made-in-Russia metal in warehouses may well increase in the coming months”she said in a statement last Friday.
Enough to “bringing some relief to the nickel and aluminum markets in particular”, Russia being a major supplier in these markets, accounting for 15% and 6% of global production respectively, Commerzbank analysts explain.
Speculations
But the upward trend in nickel over the week is explained by the reduction in production at the Goro site in New Caledonia, combined with false information about a fire in a nickel smelter in Indonesia. The factory quickly denied this information, calming the courses, estimated AFP.
“This strong reaction is, however, a sign of low market liquidity, which makes the price of nickel susceptible to more pronounced fluctuations”Commerzbank analysts point out.
Cartel
On the sidelines of the G20 summit in Bali, Indonesia advocated the creation of a cartel of nickel producers to allow them “to extract optimum returns from the electric vehicle industry and to distribute the revenues equitably among the producing countries”, they also noted.
However, the project has little chance of succeeding according to Commerzbank analysts, the interests of the countries concerned diverging too much.
LME
The nickel price pattern is positive according to analysts at London trader Marex Spectron. They are considering a 25% increase and express their “bullish belief” for the next six months.
The London metals market started to build a bullish long position.
On the wires of the financial agencies, we learn that General Motors has agreed to obtain supplies from Vale by undertaking to buy the equivalent of 25,000 tons of battery-grade nickel per year.
The producer Nornickel (Norilsk) breathes after the decision of the LME not to sanction Russian nickel. He has other concerns, but less serious. Nornickel dealt with the nickel concentrate delivery problems facing its Harjavalta smelter in Finland, deciding to find alternatives to its current method of rail transportation. The Finnish factory was originally a planned project in New Caledonia.
On the LME, a ton of nickel for delivery in three months traded at 25,752 dollars on Friday at 6:00 p.m. GMT, against 26,925 dollars the previous Friday at the close. This corresponds to a positive average between the low of $18,230 and the high of $31,275. Nickel closed up 2.25% on Friday night at the LME in London.