Nickel market caught up in fresh squeeze – by Mark Burton (Bloomberg News – January 18, 2022)

The nickel market is facing its biggest squeeze in more than a decade as buyers are forced to pay huge premiums for immediate supplies with exchange inventories plunging.

Cash contracts on the London Metal Exchange reached a $90-a-ton premium to those expiring a day later, the highest since 2010 and nearing levels seen in 2007 during a historic squeeze. It’s more evidence of acute supply stress in metals, following turmoil in copper and tin markets last year.

Nickel inventories tracked by the LME, the most important base metals bourse, have slid to the lowest since 2019. They’ve also fallen on the Shanghai Futures Exchange, leaving buyers exposed to a simultaneous squeeze in onshore and international markets. That’s keeping prices near the highest since 2011.

The surge in premiums for near-term supplies has come to a head as traders and industrial consumers rush to buy back short positions in monthly contracts that are coming due on Wednesday.

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