Demon Nickel Is Back On The Market! LME: Volatility Remains High, Monitoring Is Being Tightened

Financial Associated Press, November 17 On Wednesday, London nickel fell by more than 10% in intraday trading, the largest one-day decline since March this year. In just two weeks, its increase was as high as 40%. The sharp fluctuations in nickel prices can not help but remind people of the "demon nickel" market in March.

In the previous six trading days, nickel prices rose continuously, opening at $23,330 per ton in the first trading day, and rising to $31,275 in the last trading day.

Market turmoil was further exacerbated on Tuesday by news that nickel producer Prony Resources would cut output following a leak at its tailings dam.

Traders blame illiquidity for market volatility. Geordie Wilkes, head of research at metals brokerage Sucden Financial, said: 'The market is still very thin and what we're witnessing is the impact of low liquidity is playing out right in front of us.

Ole Hansen, Head of Commodities Strategy at Saxo Bank, commented: "The 'demon nickel' market earlier this year clearly scared off a lot of investors and led to a disorganized and chaotic market. This is clearly not what most people want to touch. market, so it's prone to extremes."

In an epic short squeeze in March, the London Metal Exchange (LME) cancelled all nickel contract trading on March 8 and suspended market trading for more than a week.

The extreme volatility of nickel prices has sparked vigilance on the London Metal Exchange (LME), which said it is strengthening monitoring of nickel trading to ensure market participants conduct their trading activities appropriately.

The LME also said in a notice to members that the initial margin for nickel trading would be raised to $6,100 a tonne after Friday's close, a 28% increase from current levels.

Other industrial metals such as copper and zinc have also risen in recent days, but at a fraction of the price of nickel.