Raw materials Nickel prices start to rise explosively: London Commodity Exchange stops trading

Nickel the price rose more than 80 percent on Monday morning from Monday’s reading until Europe’s largest commodity exchange, the London Metal Exchange, stopped trading. The price of the metal rose more than 70 percent already on Monday.

The price of nickel was still around $ 20,000 a tonne at the beginning of the year, but on Tuesday morning it hit over $ 100,000, the highest in history.

In its newsletter sent this morning, the LME refers to the “situation in Russia and Ukraine”.

“It is clear that this situation has particularly affected the nickel market,” the exchange said. According to the release, the nickel market will remain closed on Tuesday and possibly for several days.

News agency According to Bloomberg, the record rise in nickel prices could be the result of a so-called “short squeeze,” an attempt by investors waiting to see nickel fall in the market.

Bloomberg highlights the role of China Construction Bank, a state-owned bank in China, in the turbulent nickel market earlier this week. According to media reports, the Chinese bank’s subsidiary has received additional time from LME to meet its collateral requirements.

Financiers require so-called collateral requirements from derivative investors in the event that the price of derivatives develops in an unexpected manner. Typically, collateral requirements increase as the value of investment targets and price fluctuations increase.

Russia is one of the world’s largest producers of raw materials and its position in the nickel market, among other things, is significant. Western countries have imposed sanctions on Russia and Russian companies as a result of the attack on Ukraine. In addition, numerous Western companies are currently avoiding cooperation with Russian companies.

Nickel is used in the stainless steel and battery industries, among others.