Brussels-bases Eurofer, which represents companies that produce both carbon steel and stainless steel in Europe, has called on the London Metal Exchange (LME) and the Financial Conduct Authority (FCA) “to take the necessary action to resolve the massive, artificial fluctuations in nickel prices and impose indispensable measures to ensure it does not reoccur.”
Eurofer says it also is requesting “a commitment on transparency on moves by single or group of market participants exceeding regular participation and trading limits.” The LME temporarily ceased trading on its nickel contract on March 8.
The financial press has reported that extreme moves in nickel pricing volatility in late February and early March has been assigned in part to forward trading moves made by China-based stainless steel producer Tsinghshan Holding Group.
“In the last days, and since markets opened on March 7 in particular, we have seen an unprecedented surge in nickel prices that cannot be explained by supply and demand, nor by the sanctions recently imposed on Russia,” says Axel Eggert, director general of the European steel association Eurofer. Adds Eggert, “No other commodity has seen the same price increase as nickel in recent days.”
This is not the first time that such market anomalies have occurred, adds the group. Eurofer points to the summer of 2019, when “there was a similar situation of possible market manipulation by a specific player. “It is of utmost importance to solve this issue once for all so we do not see this happening a third time,” states Eggert.
A Reuters news article from 2019 indicates Tsingshan also was involved in that incident of pricing volatility, with the firm accused of “buying large quantities [of] nickel” on the LME to “supplement its own output.” That, according to Reuters, resulted in investment funds reacting by quickly reducing their hedges made tied to anticipated lower pricing.
The LME, as its name indicates historically based in London, was purchased by Hong Kong Exchanges and Clearing (HKEX) in June 2012. That was just a few months before Xi Jinping became chair of the Chinese Communist Party, ushering in an era of more direct Beijing intervention in Hong Kong’s economy.
Eurofer says it now “requests the LME to keep the market closed until stability and normal price levels are restored. It also requests a thorough investigation of the trading practices by some market players to determine whether they may constitute market abuse or the creation of a disorderly market, or another prohibited practice.”
Adds Eurofer, “Nickel is an essential element of the low carbon economy: stainless steel alone represents over 70 percent of its consumption, followed by the batteries sector.”
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An elevated cab is one of several features improving operational efficiency at the Macon County Solid Waste Management agency in North Carolina. When it comes to waste management, efficiency, safety and reliability are priorities driving decisions from day one, according to staff members of the Macon County Solid Waste Management Department in western North Carolina. The agency operates a recycling plant in a facility originally designed to bale incoming materials. More recently, the building has undergone significant transformations centered around one machine: a SENNEBOGEN telehandler (telescopic handler).
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SENNEBOGEN 340G telehandler improves the view in Macon County, NC
An elevated cab is one of several features improving operational efficiency at the Macon County Solid Waste Management agency in North Carolina. When it comes to waste management, efficiency, safety and reliability are priorities driving decisions from day one, according to staff members of the Macon County Solid Waste Management Department in western North Carolina. The agency operates a recycling plant in a facility originally designed to bale incoming materials. More recently, the building has undergone significant transformations centered around one machine: a SENNEBOGEN telehandler (telescopic handler).
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An elevated cab is one of several features improving operational efficiency at the Macon County Solid Waste Management agency in North Carolina. When it comes to waste management, efficiency, safety and reliability are priorities driving decisions from day one, according to staff members of the Macon County Solid Waste Management Department in western North Carolina. The agency operates a recycling plant in a facility originally designed to bale incoming materials. More recently, the building has undergone significant transformations centered around one machine: a SENNEBOGEN telehandler (telescopic handler).
“These massive fluctuations in the nickel market can seriously impact both the European nickel users and consumers, eventually leading to job losses, and jeopardize the EU green transition”, states Eggert.
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