LONDON, Nov 1 (Reuters) – The bears are out in force on the London Metal Exchange (LME) nickel market. Fund players have lifted their bets on lower prices to levels last seen in 2019, or even earlier if expressed as a percentage of open interest.
It’s not hard to understand why. The LME three-month nickel price has been on the slide for most of the year, sucking in momentum-tracking technical funds. Currently trading around $18,000 per metric ton, nickel is down by 42% on the start of January and challenging chart support levels dating back to late 2021.
The technical weakness is a mirror on an overwhelmingly bearish fundamental picture. The global nickel market is entering a period of massive oversupply thanks to an Indonesian production boom. Everything is pointing to still lower prices.
However, this being devilish nickel, things are not that simple. The big short is a bet on the speed with which the market can convert the growing surplus in the lower-grade intermediate products part of the market to LME-deliverable Class I refined metal.
For the rest of this article: https://www.reuters.com/markets/commodities/bears-bet-big-that-nickel-can-close-product-gap-2023-11-01/