Nickel Hits One-year High — Are Prices Rising Too Quickly?

Reuters reported that three-month nickel on the London Metal Exchange (LME) has hit a one-year high of $17,188 per tonne. While that may sound like good news, some nickel market participants are concerned that the metal’s price may be moving upward too fast.

As quoted in the market news:

There is no disputing this market’s bull narrative. The implications of the Indonesian ban will be both far-reaching and massively disruptive to China’s NPI sector.

But the current rally risks consuming itself in its own heat, the price apparently ignoring the fact that it will take time before NPI production cuts start eating into that stocks overhang.

Moreover, push things too hard and too fast in this market and strange things happen.

The most significant outcome of that 2006-2007 rally to over $50,000 was the commercialisation of a new form of producing nickel in China. It’s called nickel pig iron!

Click here to read the full Reuters report.