Nickel added to extreme volatility in commodity prices resulting from the Ukraine crisis as futures were suspended by the LME. Nickel surged 44% overnight in volatile Asian trade.
Nickel prices have risen dramatically this morning, briefly pushing above $100,000 per tonne. The exceptional price rise was driven by a short squeeze on the LME, in which traders with large short positions have hurried to close their positions.
“Nickel prices seriously hit nerves today, with trading suspended on the London Metal Exchange, after a record breaking spike in prices. The three month contract crossed the $100,000-a-tonne mark for the first time ever, doubling in value in just hours,” said Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown.
Russia accounts for 7-9% of total global Nickel production and the potential for this to be inaccessible when EV demand for Nickel is soaring has a sent waves through the market.
Nickel soared past an unprecedented $100,000 a ton on the London Metal Exchange amid a huge short squeeze. A 5 year chart. pic.twitter.com/nT1OayU3QE
— Francine Lacqua (@flacqua) March 8, 2022
Some analysts have likened the volatility in Nickel to observation in Meme stocks such as GameStop.
“The huge volatility and rapid moves in price during trading in Asia prompted the drastic decision. It seems the meme stock frenzy has now metamorphosed into commodity chaos, as traders have scrambled to try and cover short positions,” said
“Those that had bet against the metal’s rise in value, have now been forced to buy at a much higher price, creating a short squeeze.”
