The recent sharp increase in the London Metal Exchange three-month nickel price is justified by long-term electric vehicle (EVs) demand for the metal even if it is driven by the stainless steel sector in the short term, Nornickel's head of commodity research said at the 18th International Stainless and Special Steel Summit in Seville, Spain, on Wednesday September 18.
"We saw this type of price rally in 2014 on the news of Indonesia's previous ore ban from the stainless industry which caused a big disruption in the industry and I think that it was a major driver of high prices at that time and again now," Denis Sharypin said. And while many participants were shocked by such a price rally during the typically quiet third quarter of 2019, Sharypin believes Chinese stainless steel producers, including Tsingshan and Delong, were successful in anticipating a potential upcoming Asian supply shortage, leading to a spate of short-covering exercises which drove the LME three-month nickel price to hit a high of $18,850 per tonne on September 2. "But it is interesting that it all happened in the third...