Column: New year, new nickel market after LME’s 2022 meltdown? – by Andy Home (Reuters – January 8, 2023)

LONDON, Jan 6 (Reuters) – March 2022 will go down in the history books as the moment the global nickel market broke down. The London Metal Exchange’s (LME) six-day suspension of nickel trading plunged the global supply chain into pricing darkness.

The LME contract is the anchor around which producers, users and traders price a spectrum of nickel products, from refined metal to ferronickel to the new stream of sulphate heading for electric vehicle batteries.

Or at least they used to. The LME contract has returned, but it is much diminished. Volumes have near halved since March, the lack of liquidity accentuating continuing price wildness.

Don’t look to Shanghai for an answer. The Shanghai Futures Exchange has experienced an even more pronounced collapse in activity, volumes slumping by 70% last year amid rolling time-spread volatility. The search is on for a new nickel price discovery process.

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