Is the plot of "Devil Nickel" expected to reverse? What does it mean that LME announces the cancellation of some transactions and the suspension of nickel trading? Shanghai Nickel Nickel Night Market welcomes three consecutive daily limit

LME nickel varieties, which have soared by more than 200% in just two days, have become the focus of market attention. As of press time, Shanghai Nickel night trading opened by the daily limit, but there were still transactions.

On the afternoon of March 8, LME announced that LME had decided to suspend trading at least yesterday, following a further unprecedented rise in the price of three-month nickel.

"LME: will resume nickel trading no earlier than Friday and set a daily limit of 10%.

At 07:19 last night, the Shanghai Futures Exchange announced that from the trading on March 10, 2022, that is, the night trading on March 9, 2022, the handling fee for unwinding the current position in several contracts of nickel futures has been adjusted to 60 yuan / hand.

"transaction fees for tin, nickel and stainless steel futures contracts adjusted in the previous period

In addition, tin futures multi-contract within the day to open the current position transaction fee adjusted to 60 yuan / hand. Stainless steel futures multi-contract within the day open current trading fee adjusted to 40 yuan / hand.

Then, at around 8 o'clock last night, LME issued another announcement that it would cancel all transactions executed on or after 00:00 UK time on or after March 8, Beijing time, on the interoffice market and on LMEselect until further notice (affected contracts).

Due to the suspension of transactions complying with the procedures described in this notice, all spot delivery nickel contracts to be delivered on March 9, 2022 and any related infeasible delivery dates (notified to the market by LME).

The Shanghai Futures Exchange also issued a notice before the opening of night trading tonight, saying that the recent international situation is complex and changeable, and the price of nickel in the overseas futures market has fluctuated sharply. Our institute will take further measures in accordance with the rules and regulations according to the market situation. Please member units and investors to do a good job of risk prevention, rational investment, and jointly maintain the smooth operation of the market.

The market experienced an exchange announcement war for "demon nickel" tonight.

In the view of people in the industry, the current trend of nickel prices is mostly affected by capital and news factors, and the risk of market volatility is greater. From the point of view of the domestic market, due to the extreme negative price difference between Shanghai and London, the sharp rise of Lunni has pushed Shanghai Nickel passively to follow the rise, and once Lunni turns downwards, it will undoubtedly increase the risk of bilateral volatility of Shanghai and Nickel, and investors should pay attention to the differences between domestic and foreign markets. Be careful to participate in market transactions.

LME: further considers whether previous transactions need to be reversed or adjusted

The announcement of this disclosure mainly includes summary, background, definition of terms, action measures, next work and so on.

As for the reasons for the suspension, LME said LME had been in close discussion with the special committee and continued to monitor the market and the impact of the evolution of the situation in Russia and Ukraine. The impact on the nickel market is particularly obvious. In view of the price movements in Asia this morning, LME made the above decision on the basis of an orderly market.

With regard to specific action measures, LME said trading would be suspended from 08:15 London time on March 8, 2022.

LME select electronic trading system will suspend trading, the circle will also suspend nickel trading. In addition, after the above announcement time, brokerage inter-office transactions should no longer be registered for nickel transactions. The margin for the LME nickel contract will be calculated on the basis of the closing price on March 7, 2022. LME Clear will consider what additional measures, if any, should be taken from a risk management perspective. LME's other contracts will continue to trade normally and LME will keep a close eye on them.

On the next step, LME said it will actively plan to resume trading in the nickel market and will announce the specific mechanism for resuming trading to the market as soon as possible. Given the geopolitical situation affecting recent price movements, LME may consider suspending the market for several days. In this context, LME will also consider handling deliveries that are about to expire.

It is worth noting that at that time, LME said it would further consider whether transactions concluded before 08:15 today's London time need to be cancelled or adjusted, and would inform the market as soon as possible.

A few hours later, LME announced that it would cancel all transactions executed on or after 00:00 UK time on or after March 8, Beijing time, on the interoffice market and on LMEselect until further notice (affected contracts).

In this regard, some industry insiders said that LME may be out of the relevant control measures or mediation measures. "if the exchange puts out some restrictions or mediation measures, the market pressure on positions may ease, or the bulls may want to run away and stampede."

The rising market is out of touch with fundamentals, and exchanges and futures companies prompt risks.

With the sharp rise of LME nickel, the main domestic Shanghai nickel futures contract has always sealed the trading board during the day. Before the opening of the night trading last night, the last issue of a number of varieties of poundage adjustment, as well as ups and downs limit board, margin adjustment notice.

"margin ratio and limit range of gold, copper, aluminum, lead and zinc futures contracts adjusted in the previous period

In fact, as early as today, before the suspension of trading in LME nickel, domestic futures exchanges and futures companies have issued risk warnings many times.

According to the official website of the last stock exchange, from February 23 to March 7, the stock exchange has issued three market risk warning notices and a series of risk control measures, in which the exchange reminded the relevant units to do a good job in risk prevention and rational investment. Today is the fourth round of risk warning notice recently.

Citic Futures: Shen Lighting, non-ferrous group of the research department, said that the current price trend of LME nickel has been difficult to fully attribute to the strong fundamental support logic, and there may be a phenomenon of bullish positions in the disk, which may lead to extreme price movements.

The research team believes that, first of all, in terms of recent market speculation, Russian nickel exports to Europe and the United States account for more than 40% in recent years. Under the background of the continuous deterioration of the situation in Russia and Ukraine, worries about nickel supply in the European and American markets are rising rapidly, which is the main expectation to promote the recent rise in nickel prices. And the expectation that Russian nickel exports turn domestically under trade sanctions will lead to an increase in domestic nickel supply, resulting in persistent internal and external price differences and rapidly widening domestic import losses.

Secondly, from the perspective of nickel's own fundamentals, the strong fundamentals remain unchanged in the short term. Under the background of skyrocketing battery demand and the increase in stainless steel production, inventory at home and abroad has been reduced to a low level. Overseas inventory has been reduced by nearly 60 to 77000 tons compared with the high point, and the inventory of nickel in Shanghai is only 13000 tons. there is a shortage of nickel resources in the market, the spot water in China has risen sharply, and the Cash-3M premium water in London has reached an extremely high level of US $690 / ton at one time.

"at present, nickel prices are mostly affected by capital and news factors, and the risk of market volatility is greater." Looking forward to the later stage, the group believes that in the domestic market, due to the extremely negative price difference between Shanghai nickel and LME nickel, the sharp rise in LME nickel has pushed Shanghai nickel passively to follow the rise, and once LME nickel turns downwards, it will undoubtedly increase the risk of bilateral fluctuations in Shanghai nickel, investors should pay attention to the differences between domestic and foreign markets and carefully participate in market transactions.

Guoxin Futures: gu Fengda, head of the research and consulting department, also said that in the past two weeks, the company's research and consulting team has constantly reminded investors of the risk of price changes under the mismatch between supply and demand of bulk resource products represented by nickel, while in recent days, the LME nickel market has experienced a continuous abnormal daily fluctuation rarely seen in history, which is precisely the "stress response" under the mismatch between supply and demand and low inventory, and the price is obviously out of control.

Judging from LME's frequent announcements yesterday, LME's chief executive said the exchange was also considering measures to ensure that inventories were not exhausted, including sometimes preventing traders from taking delivery.

Gu Fengda believes that compared with the current price of 80000 US dollars per ton of LME nickel and the cumulative annual increase of more than 286 per cent, the main contract of Shanghai nickel futures yesterday closed at 228810 yuan / ton during the day, the highest level since listing. Although the cumulative annual increase is more than 50 per cent, it is far less than the surge in overseas nickel prices. If there is no supervision at home and abroad, it is difficult to solve the dilemma of short-term supply and demand mismatch inventory and low market adjustment mechanism in the nickel market.

"for the spillover effects that may be caused by extreme fluctuations in the current international nickel price, we suggest that the majority of investors be vigilant against the forced rise caused by the mismatch between supply and demand and low inventory." He suggested that at present, investors should try their best to avoid the extreme fluctuations caused by geopolitical black swans and the uncertainty of sanctions, and grasp more trend opportunities. Institutional investors can focus more on the arbitrage opportunities of price spread regression and external strong and internal weak price drop under the extreme fluctuations of other non-ferrous varieties, but paying attention to capital management and risk control is the first priority to participate in the futures market.

Financial Associated Press reporter: Zhou Xiaoya