Nickel prices usually move a few hundred dollars per ton in a day. For most of the past decade, they’d traded between $10,000 and $20,000.
Yet the day before, the market had started to unravel, with prices rising by a stunning 66% to $48,078. Now, the traders watched with a mixture of horror and grim fascination as the price went vertical. Already at an all-time high by 5:42 a.m., it lurched higher in stomach-churning leaps, soaring $30,000 in a matter of minutes. Just after 6 a.m., the price of nickel passed $100,000 a ton.
https://www.bloomberg.com/news/articles/2022-03-14/inside-ni…
Chinese tycoon Xiang Guangda is partially responsible. One of the world’s largest nickel producers (you’d think he wouldn’t be shorting, eh?) amassed a huge short position based on his belief that the pandemic induced supply reduction would bounce back and prices would retreat. Instead, Russia invaded Ukraine, one of the world’s largest producers of nickel.
Macroeconomically, this is rebound globally: most notably, nickel is a key component in EV batteries. Oops. But it’s not just that, nickel is used in everything, it’s a key alloy for most things made with iron and steel.
Most astonishing about this story, the next day, following the massive short squeeze, the London Metal Exchange decided that all the trades that happened the day before really didn’t, they voided all trading after-the-fact. True. I remember reading a Tom Clancy novel which had this as a plot point and I practically threw down the book exclaiming “That could never happen.”
Apparently it can. Read the Bloomberg story for full details. Amazing, really.