Nickel fell to $14525 a tonne on the London Metal Exchange (LME) (LME), down more than 19 per cent from its high in early September and close to the 20 per cent decline defined by the prevailing bear market, SMM11 reported on March 20.
Indonesia's unexpected decision to ban nickel ore exports ahead of time sparked fears of a tightening global supply of nickel, which hit a high. The current decline has brought the price of nickel closer to the current price of the original mine. In recent weeks, Indonesian miners have ramped up exports ahead of the ban, and nickel prices have plummeted.
As nickel inventories in Shanghai rose and LME stocks stabilized, concerns about nickel supply were quickly replaced by concerns about its deteriorating demand prospects. With nickel prices down 13 per cent so far in November, the biggest one-month fall in five years, short-term technology traders have been fuelling the decline, adding to bullish pressure on nickel bulls who have been betting that the market will move towards a long-term scarcity of nickel.
"so far, investors have been a little nervous about nickel trading, but the momentum is growing," BMO CapitalMarkets Ltd. said. Colin Hamilton, managing director of commodities research, said by phone from London. "prices did need to be stable before, and to my surprise, it happened so fast, but that's how the nickel market works."
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