Nickel markets may be chaotic, but long-term outlook very strong, analysts say – by Darren MacDonald (CTV News Northern Ontario – March 30, 2022)

It’s been a wild ride for nickel prices this month. After soaring to almost US$22 a pound, the London Metals Exchange (LME) halted trading for several days March 8, outraging many investors.

A major reason the LME intervened was a major Chinese nickel producer stood to lose billions because it had bet prices would be lower. Investors sometimes try to protect themselves from volatile prices by betting prices will be lower in the future, a process known as short selling.

In this case, however, Russia’s invasion of Ukraine spooked markets and prices soared. The difference between the expected price and the price March 8 was so great, Chinese nickel miner Tsingshan stood to lose as much as $8 billion.

When trading resumed several days later, the LME instituted limits on how much nickel prices could fluctuate. After dipping to $12.77, the price stood at $15.22 on March 30. What does it all mean for places such as northern Ontario, where long-term demand for nickel to make batteries for electric vehicles is expected to drive economic growth?

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