Supply concerns spark extreme market volatility in commodity markets(2)

Fu Xiao said that from a fundamental point of view, the reasons for the surge in nickel prices for this round are as follows: First, the production of new energy vehicles has grown strongly, nickel inventories are low, and the nickel market has faced a shortage of supply in the past year; It accounts for 7% of the world's total, and the market is worried that if Russia is subject to more extensive sanctions, the supply of nickel and other metals will be affected; third, the decrease in Russia's energy supply has increased the global demand for electric vehicles and clean energy; fourth, high international oil prices have pushed up Metal mine and smelter costs.

The "short-squeeze" operation of some institutions is also one of the reasons for the "surge" of nickel prices. After the "short squeeze" market appeared, the London Metal Exchange announced on the 8th that from 8:15 local time on the 8th, it will suspend the trading of nickel contracts in all locations on the exchange market. The exchange subsequently issued an announcement to cancel the nickel trading executed on the OTC and screen trading systems after 0:00 local time on the 8th, and postpone the delivery of all spot nickel contracts originally scheduled for delivery on the 9th.

Fu Xiao believes that with the ongoing crisis in Russia and Ukraine, the prices of basic metals such as nickel may remain high and fluctuate.