“We can’t help but have nickel as our least-preferred long position for the medium term due to the market’s bearish supply backdrop,” Nugent said on Friday September 18. “And there is a lot of debate about how it is that a market can rise through what otherwise looks like multiple views of very weak physical balances.”
But while price and stock action on the LME continue to confound, the same cannot be said of the physical versus futures balance on the Shanghai Futures Exchange.
This is something that Nugent believes is attributable to real physical demand in China amid strong post-pandemic economic recovery and what could keep nickel trading in positive territory despite a slack supply balance.
The LME three-month nickel price was most recently trading around $14,695 per tonne on Monday September 21, up 31% from the year-to-date $11,142 per tonne low on March 23 while LME...