COLUMN-Nickel flies on supply hits; Indonesia could ground it – by Andy Home (Reuters U.S. – February 16, 2018)

LONDON, Feb 16 (Reuters) – Nickel has enjoyed a blistering start to 2018. On the London Metal Exchange (LME) three-month nickel has this week punched up through the $14,000 level for the first time since May 2015 to hit a Thursday high of $14,420 per tonne.

It has gained 10 percent since the start of the year and has bounced 34 percent from its December low of $10,740 per tonne. Speculative money has poured into this hot market, fund managers tripling their net long exposure LME-NI-MNET to the London contract over the course of December and January.

Shanghai investors have been equally enthusiastic, albeit with a Chinese twist of treating nickel as a bullish steel rebar derivative. Nickel is basking in the electric vehicle glow but the full demand impact is still in the future.

Right now, rather, this is a good old-fashioned commodity story of strong demand from the global stainless sector, falling stocks and supply hits, both expected and unexpected. Indonesia, however, is waiting in the wings.

Four years after the country upended the nickel market with its ban on exports of ore, it is set to return to the world stage, bigger and more integrated than ever before.


Brazil’s Vale kick-started this rally with a Dec. 6 announcement it was cutting production by 15 percent, or 45,000 tonnes, in 2018 to “preserve its nickel optionality”.

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