The lme nickel price of $100,000 is invalid。
On 8 march, local time, the london metals exchange (lme) announced the cancellation of all nickel transactions in london time at 00:00 a. M. On 8 march 2022 (beijing time, 8 march at 8 a. M.) and after that, in addition to the off-site trade and the implementation of the lme security screen trading system. In addition, lme decided to postpone the delivery of all spot nickel contracts originally scheduled for delivery on 9 march 2022。
On 8 march, lme nickel continued to surge all the way, until a small return was made after a breakthrough of $100,000 per ton. As at around 4 p. M. Beijing time on 8 march, when lme suspended its nickel deal, lme was set at $80,000 per ton, an increase of 66. 40 per cent in the day。
Lme had previously declared a suspension of nickel futures transactions。
In the statement, lme stated that it had been monitoring market developments and the effects of the changing situation in russia and ukraine, “it is clear that this has had the most significant impact on the nickel market, and in view of the price trends in asian time this morning, lme decided to suspend nickel futures trading on the basis of maintaining market order”
Lme indicated that, given the geopolitical situation, lme might consider stopping the cards for many days. The current lme nickel contract bond will be calculated on the basis of the closing price as at 7 march 2022。
Lme added that other contracts would continue to be regularly traded but would receive close attention。
In other words, the 100,000-day price line established by lme nickel on 8 march was considered invalid。
“lme nickel at the closing price of $50,300 as at 7 march and the settlement price of $48078. If the transaction of 8 march in london is considered invalid, it is the settlement price as at 7 march.” wang zheng, the chief strategic researcher of the fong medium-term institute, said to journalists。
Wang jun noted that this would facilitate the normal conduct of the global nickel trade and the entire non-ferrous metal trade, and would be beneficial to the institutions or enterprises in the empty direction of lme, which could be eased by enterprises that did not have enough nickel to deliver。
Why is the price of nickel flying
In response to journalists, wang yangqing, the future analyst of chongqin, said that the nickel supply would be affected by three aspects of the current situation。
One is the obstruction of russian nickel exports. Against the backdrop of the continued expansion of european and american sanctions, the decline in russian nickel exports is inevitable. Domestic nickel supply concerns have been weak, resulting in a continuing spread of prices。
The second is the inflationary effects of rising energy prices. The united states sanctions against the russian energy sector continue to push up crude oil prices, while europe's shortage of natural gas would lead to higher prices for a range of downstream products, including nickel. From an industrial point of view, higher energy prices will affect supply from smelting costs and cut-off responses。
Thirdly, there is a potential reduction in russian nickel. Russian nickel companies are likely to reduce production targets due to uncertainty in sales, and there is a potential for a significant reduction in nickel supply。
Wang jianqing further stated that it was difficult to explain the fundamentals of the magnitude of the increase in the price of the lonnie futures bill. In extreme cases, there will be a surge and fall, as there are no increases or drops in the rennie futures. The current very low stock of lon nickel and its supply-side problems make it highly vulnerable to the risk of prevarication, with prices being significantly driven by funds。
“this high increase has been completely detached from the effects of essentially nickel prices, as the global share of russian nickel production has been relatively small, driven mainly by financial resources and emotions, and the influx of large numbers of investors has created a very severe squeeze on the air.” the south china futures metal analyst, haji, also indicated to journalists。
According to bloomberg, a trading manager said that “it is crazy that this increase does not reflect any fundamentals of the industry”. He added that “the lme trading system is out of control and requires intervention, otherwise the phenomenon may spread to other metals”
For a 145-year-old lme, “suspension of nickel futures trading” is an unusual shift. Malcolm freeman, kingdom futures broker, said: “lme made the right choice and my instinct was to cancel today's deal.”
Reuters reports that the qingshan holdings bought large quantities of nickel to reduce their empty nickel positions and risk exposure to high additional bonds, thus contributing to a record increase in lme nickel。
According to one source, the drop in nickel prices in qingshan holdings totalled approximately 300,000 tons, with average prices ranging from $18,000 to $19,000 per ton。
According to media reports, 200,000 tons of nickel blanks opened by the qingshan holdings may not be delivered as russian nickel is kicked out of the exchange. The market is rumored to be able to hold stock on lme nickel for 60 per cent of indonesia's nickel mine. Qingshan holdings is a co-sponsor of china's nickel development project. In response to this, the swiss sources replied to the journalist that “an unofficial statement is not true”
