Towards a nickel boom? It is still too early to say but the London market hopes that harmony will prevail over the differences at the G20 summit in Osaka. “Industrial metals need a peaceful environment, Caledonian nickel too, because commercial wars are weighing on human activity,” said Philippe Chalmin, expert and historian of raw materials, founder of the Cyclops circle.
In any case, metal is “the star of the London market” this week said Malcom Freeman, managing director of Kingdom Futures, an international merchant of the City. The sharp recovery in nickel prices is also due to a return of financial investors. The latter had sold their positions around 11,700 dollars per ton, before realizing their mistake. By buying nickel lots, they favored the rise of prices.
In London, earlier this week, the Metal Exchange was lacking vigor and direction. So, the temporary shutdown of a large nickel plant in New Caledonia has aroused the curiosity of analysts. Queries that were worth their rain dollars. Not that the incident at the Koniambo nickel plant was important, the market quickly rated it as secondary, but this Monday in June and in the heat of summer, traders did not have much others to put in their mouths. So we talked about New Caledonia in London before concluding that the incident in “Glencore plant” (Glencore north plant) as it is called in the City, was not enough to move the courses nickel.
On Wednesday, in any case, the factory of the North was already forgotten. It must be said that nickel was challenging the general concerns of other industrial metals because of its strong future prospects: “a raw material at the heart of the next electric vehicle revolution,” said Alastair Monro, an analyst with Trader Marex Spectron at the LME, for its part the agency Goldman Sachs added that "the market became aware of the boom in the potential demand for nickel offered by the revolution of electric batteries."
Against this optimistic backdrop, the announcement of a 500,000 tonne reduction in Global Ferronickel ore production in the Philippines was enough to boost metal prices. On Thursday, nickel reached an interim high of $ 12,375 per tonne, the highest since June 24. And since two pieces of information are better than one, the Australian bank Macquarie published a study by Jim Lennon, well known to industrialists in New Caledonia, indicating a drop of 41,000 tons in six months nickel stocks LME global warehouses. Good news that allowed the continuation of the rise in the price of metal, ie its “rally”, to use the term used by the Metal Bulletin.
On Friday, the market continued its momentum, the G20 talks reinforcing, rightly or wrongly, the optimism of the London Metal Exchange. Nickel traders are betting on positive developments for the global economy during the G20 summit in Osaka, Japan. Reasons to believe it? In any case, nickel was the most traded and demanded metal during Friday morning trading at the London Metal Exchange (LME).
Nickel price at three months at LME - 16H00 GMT - $ 12,747 per tonne ($ 5.78 per pound) + 0.12%. Over the week, nickel rose 5.20% and 19.34% since the beginning of the year.