Economic security

LME nickel price rallies 10% amid ‘sanction hysteria’

Nickel prices on the London Metal Exchange are trading at their highest since December 2014, with concerns about further sanctions fueling a significant rally, sources said.

The three-month price rocketed to $15,875 per tonne in early afternoon trading on Wednesday April 18 – rising over 10% from Tuesday’s LMEselect close, nickel’s largest one-day move since 2009.

“We put it down to a deep market fear of further sanctions, the market is in uncharted territory and within a blink of an eye the price was up 10%. It is all market hysteria,” an analyst said.

On April 6, the US Treasury Department announced sanctions on Russian tycoon Oleg Deripaska’s assets, including UC Rusal. This has in turn led to concerns in the nickel market due to Deripaska’s Rusal holding a 27.8% stake in Norilsk.

Fellow Russian Vladimir Potanin is the largest stakeholder of Norilsk with 33% stake, but Potanin is currently unaffected by this level of sanctions which were announced on April 6.

“Nickel surged while fresh demand for the metal is arising as traders and consumers stock up ahead of potential sanctions against Norilsk,” John Meyer of SP Angel said.

“There is panic, panic, panic which caused problems and pushed the price up above $15,800 per tonne. It was a complete buying frenzy for a few hours and technical levels got smashed out of the water,” a market source added.