to Reuters, “around 70% of the nickel supply chain is now priced at a discount to the LME benchmark.”Just over one year ago, the nickel market witnessed a squeeze that saw prices roughly triple before the LME promptly halted and canceled trades. The controversial move by the exchange triggered an exodus across many of its contracts, but especially nickel.
The LME plans to fast-track the approval of new brands it allows suppliers to deliver against its contracts to three months, the first being coarse nickel powder. The organization also announced a fee waiver for new brands. The exchange will launch a new Class 2 spot market in China for both nickel matte and nickel sulfate.The LME will reassess and recalculate the amount of cash required for dealers to post for trading losses. This While the LME is yet to implement many of these changes, the announcement saw no major market shift. Nickel prices continued to edge downward during the first week of April, before they hit a bottom on April 6.
The statement claims the purpose of the indices is for “transactions, budgeting, forecasting and as a tool for the Indonesian government to control and monitor nickel mines and downstream activities.” One index will relate to nickel produced in Indonesia, while the other will relate to Indonesian nickel ore.
Like the LME, GCHL has taken note of increased nickel output from Asia. Should the upcoming indices gain traction and start being used to value exports for taxation, they could become a benchmark. Exchanges could also develop the indices to create futures. Meanwhile, the market still awaits the launch of GCHL’s Class 1 nickel trading platform, which it expects to go live later this month.