Nickel Squeeze Concerns Spark Rally as EV Demand Evolves

On prices, First half of the month, nickel briefly touched prior lows around $15,500 per tonne but bounced back up into $16-$16,500 range, where they have spent the bulk of recent time, but saw a big rally where prices moved more than $2,000,$1/lb over $18,000 per tonne (Now at $17,600) as concern about ore supply keeping market tight despite demand weakness. Nickel inflows into inventory a little heaver –but consistent with seeing additional exchange deliveries before market balances. One of the key themes from LME week was some optimism from Chinese participants as the latest dose of stimulus is having a change in sentiment – good because Chinese macro issues have an impact on both stainless and battery markets. Sulphate prices have come off a bit, and ore squeeze driving prices have paused and have seen prices for ore/NPI/stainless come off a little bit. Continued weakness in lithium prices is dampening any need for the battery supply chain to order raw materials, and they are happy to continue to destock.