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Nickel: Market Showing Increasing Signs Of Stress

METALS
  • Stockpiles held by the London Metal Exchange extended their decline on Tuesday, with the last increase coming in October. Buyers are paying a massive premium for immediately deliverable futures. (Mining Weekly)
  • The key cash three-month spread, which briefly eased on news of additional shipments from Tsingshan Holdings Group, notched new highs on Monday. Contracts for immediate delivery are trading at a $508-a-ton premium to those in three months, the highest such premium since a historic squeeze in 2007.
  • The squeeze throughout December was focused on near-dated contracts, however in recent days, it has spread through the curve. That shows the market is now pricing in tighter nickel supplies for longer, amid strong demand from stainless steel producers and battery manufacturers.

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