LONDON (Reuters) – Nickel bears have been sent running for cover by this week’s ferocious squeeze on the London Metal Exchange (LME). Short-dated time-spreads have flexed out to levels not seen in many years as a long-running decline in LME nickel stocks translates into cash-date tightness.
The resulting bear rout has halted a six-month downtrend in the outright nickel price. Bulls, however, should not get overly excited. There is as yet scant evidence this was anything other than a flash squeeze rather than a signal for higher prices.
But that is not to say there won’t be more such spread tension in the nickel market going forward. That nickel should be squeezed this week is no accident. Today is the LME’s “third-Wednesday” prime prompt date, the monthly clear-out of outstanding positions. Continue Reading →