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Looking for a new, post-spike equilibrium


Nickel prices surged in mid-April during the height of the frenzy about US sanctions impacting Rusal, on speculation that supplies of Russian nickel might be affected too. Prices spiked to $16,690 per tonne intraday on April 19, having started the month below $13,000 per tonne. Nickel’s previous 2018 high, from February, was $14,420 per tonne, but prices had already reversed back below this former top just three trading days after their April spike. The reversal comes on the back of the US toning down its sanctions rhetoric.

Nevertheless, on the nickel price chart, the latest spike, although being unwound now as the speculative froth comes off, has put another ‘higher-high’ in the strong uptrend that started in Q3 2017, reinforcing its bullish significance at least from a technical perspective. The focus is now returning to nickel’s own fundamentals. Falling exchange stocks show that the global market remains in deficit, which should provide support as a new post-spike price equilibrium is sought.

In this regular section, Metal Bulletin Research’s base metals team summarise their in-depth reports to highlight key factors driving the markets and their short-term price forecasts. The weekly service, Base Metals Market Tracker, provides independent analysis and forecasts for base metals markets and prices.

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