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Nickel trading at the LME reopened at 8AM UK time Wednesday; however, was halted after a technical glitch allowed several trades to occur below the new daily trading limit band. For nickel, the daily price limit is +/- 5% of the prior day’s closing price on the 3M contract. The implementation of trading bands is a rare move for the LME. Citing “orderly market grounds,” the LME closed nickel markets last Tuesday (March 8) after the 3M contract traded to $101,365/mt, a 250% move from the prior Friday’s settle at $28,919/mt. The extraordinary price action stemmed from the “short squeeze” of Chinese nickel and stainless-steel producer who held a large short position in nickel contracts and potentially faced billions in losses. After receiving several bank loans, this Chinese producer has met all margin obligations. The LME needed this trader’s margin calls to be met before trading could resume. All other LME metals now have a daily price limit of +/- 15% the prior day’s closing price on the 3M contract. Consumers who are concerned about their nickel input costs might consider purchasing swaps or call options. Please note that doing so might incur losses if prices decrease. Please contact AEGIS for specific strategies that fit your operations. (3/16/22) |
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Note: Clients with AEGIS Platform access can see this and other research, plus hedge portfolio reporting and tools here. |
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Today's Charts |
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AEGIS Insights |
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03/02/2022: AEGIS Factor Matrices: Most important variables affecting metals prices 02/15/2022: Section 232 Tariffs: Most relevant developments (AEGIS Reference) |
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| Important Headlines | ||
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3/16/2022: LME nickel trading halted in chaotic market resumption 3/15/2022: China's Tsingshan enters deal with bankers to resolve nickel trade position 3/14/2022: The Shenzhen lockdown will affect everything from cars to iPhones: ‘It’s going to be really bad’ 3/14/2022: UPDATE 1-China's Tsingshan agrees standstill agreement on LME nickel margins with banks 3/14/2022: China Covid spike: Shenzhen shuts production, Shanghai closes schools 3/14/2022: Palladium dives about 17% as Russia supply fears recede 3/13/2022: Wall St Week Ahead Investors jump into commodities while keeping eye on recession risk 3/12/2022: UPDATE 1-Russia's Nornickel has new routes for palladium supplies -Potanin tells RBC |
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| Important Disclosure: Indicative prices are provided for information purposes only, and do not represent a commitment from AEGIS Hedging Solutions LLC ("Aegis") to assist any client to transact at those prices, or at any price, in the future. Aegis makes no guarantee to the accuracy or completeness of such information. Aegis and/or its trading principals do not offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program.
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