LME extends nickel market freeze to sort out huge trading loss

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The London Metal Exchange will keep its nickel market (LN1:COM) closed at least until next week, allowing it more time to resolve a crisis caused by the ~$8B loss-making trade by China's Tsingshan Holding, the world's largest nickel producer, which had built up a huge short position.

Before the LME halted trading on Tuesday, the nickel contract rose as much as 111% to $101,365/ton, more than 3x higher than a week ago, then pulled back to ~$80K/ton.

Nickel trading has continued in the Shanghai market, where contracts fell on Thursday by the maximum 17% for the second day in a row, indicating that pressure on the market was easing.

Sanctioning nickel from Russia - which produces 17% of the world's top-grade nickel - would slow the adoption of electric vehicles and hinder the decarbonization of Western economies, according to a new report from GlobalData.

Since nickel is used in the production of EV batteries, any sanctions placed on Russian nickel will cause EV manufacturing prices to rise further, according to the report.

Russia's Norilsk Nickel (OTCPK:NILSY), which is responsible for 5% of the world's annual production of nickel and 40% of its palladium, had its debt rating cut to junk by Fitch Ratings.