First Lumber. Then Tin. Now the Newest Squeeze Is in Nickel (Bloomberg News – January 14, 2022)

(Bloomberg) — Nickel rallied to the highest in more than a decade as dwindling exchange inventories leave traders bracing for a historic supply squeeze.

In a sign that traders are scrambling for spot supplies, cash contracts traded at the widest premium to three-month futures since 2007 on the London Metal Exchange on Thursday.

And with Shanghai Futures Exchange stockpiles near a record low, nickel’s tight supply dynamics have made it the star performer during a broad rally in base metals markets this month, with prices up 9.1%.

Nickel climbed as much as 3.4% to $22,935 a ton on Friday, at the highest since August 2011. Investor interest is growing amid booming use in electric-vehicle batteries, providing a further boost as metals rally on the back of deteriorating supply. Prices have also been supported after Indonesia said it’s considering a plan to impose an export tax on some nickel products.

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