This week nickel prices have been posting new records “nickeling” themselves from possible “corrosion” or decline. Prices of this metal surged to a record high in a decade above $25,000 per tonne. The rally continued on Tuesday after the trading session opened with a gap of $25,370 per tonne.
Technological, market-driven, and political factors are also pushing prices to the top. The demand went up as the pandemic fades and the economy recovers, while car and aircraft manufacturing, chemical and petrochemical industries, green economy and consumer discretionary are responsible for most of the demand hike. The demand is also driven by China as its economy is booming while consuming more than half of global nickel production. Production though is clearly lagging behind demand due various restrictions.
Nickel stocks on the London Metal Exchange (LME) in February 2022 are at 30% of April 2021 levels. The most important driver of nickel prices, however, is geopolitics. Risks of wide-scale military conflict between Russia and Ukraine in the middle of Europe and possible sanctions affecting nickel production may weaken supply as Russia produces 6% of global nickel output, delivering 5.3% to the global market.
Geopolitics is expected to be a dominating factor, at least for this week. In the case that things will settle, prices may return to $23,800-24,200 per tonne, or to the support level where previous highs are located. But the overall upward trend is likely to be maintained over the next months as seasonal factors are expected to drive demand even higher, while the supply in February-March is rather limited by the bad weather in Southeast Asia, particularly near nickel fields in Indonesia, from which the largest deposits of this metal are mined.
Analysis and opinions provided herein are intended solely for informational and educational purposes and don't represent a recommendation or investment advice by TeleTrade.
We are ready to assist you in every step of your trading experience
by providing 24/5 multilingual customer support.
Risk Warning: Trading Forex and CFDs on margin carries a high level of risk and may not be suitable for all investors. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.19% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Prior to trading, you should take into consideration your level of experience and financial situation. TeleTrade strives to provide you with all the necessary information and protective measures, but, if the risks seem still unclear to you, please seek independent advice.
© 2011-2023 Teletrade-DJ International Consulting Ltd
This website is operated by Teletrade-DJ International Consulting Ltd, which is registered as a Cyprus Investment Firm (CIF) under registration number HE272810 and is licensed by the Cyprus Securities and Exchange Commission (CySEC) under license number 158/11. Teletrade-DJ International Consulting Ltd is located at 88, Arch. Makarios Avenue, 2nd floor, Nicosia Cyprus.
The company operates in accordance with the Markets in Financial Instruments Directive (MiFID).
The content on this website is for information purposes only. All the services and information provided have been obtained from sources deemed to be reliable. Teletrade-DJ International Consulting Ltd ("TeleTrade") and/or any third-party information providers provide the services and information without warranty of any kind. By using this information and services you agree that under no circumstances shall TeleTrade have any liability to any person or entity for any loss or damage in whole or part caused by reliance on such information and services.
TeleTrade cooperates exclusively with regulated financial institutions for the safekeeping of clients' funds. Please see the entire list of banks and payment service providers entrusted with the handling of clients' funds.
Teletrade-DJ International Consulting Ltd currently provides its services on a cross-border basis, within EEA states (except Belgium) under the MiFID passporting regime, and in selected 3rd countries. TeleTrade does not provide its services to residents or nationals of the USA.
Material posted here is solely for information purposes and reliance on this may lead to losses. Past performances are not a reliable indicator of future results. Please read our full disclaimer.CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.19% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.