The nickel market is facing the worst supply shortage in more than a decade.

The global nickel market is facing its worst supply crunch in more than a decade, as buyers are forced to pay exorbitant rising water for spot supplies as exchange inventories fall sharply, according to industry analysts. LME spot nickel rose to $90 a tonne from the nickel futures contract (TOM/NEXT), which expires a day later, the highest level since 2010 and close to the level of nickel during the historic supply crunch in 2007. This is one of the more evidence of tight metal supply following the turmoil in the copper and tin markets in 2021. LME nickel stocks have fallen to their lowest level since 2019. On the other hand, nickel inventories on the Shanghai Futures Exchange are also falling, causing nickel buyers to face tight supply in both domestic and international markets, keeping nickel prices near their highest level since 2011. But analysts say the recent supply rally appears to have peaked as traders and industrial consumers buy back short positions in monthly contracts that expire on Wednesday. The strong demand for nickel in the electric car battery industry and new concerns about Indonesian supply have caught many market participants off guard. "the supply crunch in Shanghai has now affected the London market," Alastair Munro, a senior analyst at Marex, said in a report. "Nickel inventories on both exchanges (LME and Shanghai Stock Exchange) are at low levels and there is still no sign of inventory picking up." In essence, traders and consumers have been "forced out", and recent data show that electric vehicle sales have rebounded. " Nickel prices have been strongly supported by the decline in nickel inventories, Citic Futures said in a report.