The price of nickel this morning is up an astounding 40%, with the metal currently trading at $41,991 on futures markets, as per Investing.com. While many commodities are currently up in early morning trading, nickel has by far had the strongest move, having set a new high this morning of $47,891.50.
The move is believed to be a result of a short squeeze on the metal, as Russian exports continue to be hampered by international sanctions. The country itself currently accounts for approximately 7% of global production, with a single firm, referred to as Norilsk Nickel, accounting for 5% of global nickel production.
While that firm has not yet been sanctioned, and is viewed by some as “too big to sanction,” it hasn’t stopped commodity traders from fearing the worst. Global firms are currently working to diversify their supply chains to move away from using Norilsk as a supplier given sanction fears, as well as the difficulty of transacting with such firms due to financial sanctions and trouble related to getting product out of the country.
The soaring price does not bode well for electric vehicle manufacturers, whom are heavily reliant on the use of nickel to power their vehicles. Tesla (NASDAQ: TSLA) vehicle batteries for instance utilize an estimated 45 kilograms of nickel per vehicle, with that consumption figure expected to rise as the firm looks to remove cobalt from its battery construction.
Naturally, it remains to be seen whether this is in fact a short term short squeeze, or whether the current pricing will remain as Russia continues to engage in conflict.
Information for this briefing was found via Investing.com, Bloomberg and Reuters. The author has no securities or affiliations related to this organization. Views expressed within are solely that of the author. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.