LONDON – The London Metal Exchange said on Wednesday it was monitoring nickel prices, which have soared due to tight supplies, robust demand from electric vehicle battery makers and large draws on stocks.
The premium or backwardation for tom/next — buying tomorrow and selling the day after — jumped to $90 a tonne on Tuesday, its highest since 2010. It was trading around $2 a tonne on Wednesday.
The premium for the cash over the three-month nickel contract was around $370 a tonne compared with a 13-year peak of $495 a tonne on Tuesday.
The benchmark three-month nickel price climbed to $22,935 last week, the highest since August 2011.
“The LME notes the current tightness in the nickel market,” the exchange said in response to a request for comment.
“We are undertaking enhanced monitoring in respect of nickel market activity and we have further options available to ensure continued market orderliness if these are required.”
Nickel inventories in LME approved warehouses at 94,830 tonnes have fallen around 65% since April last year.
About 50% of the total is bagged briquette, easily crushed into small particles and dissolved in sulphuric acid to make nickel sulphate used for batteries.