Nickel prices hit their daily limits in London and China n Thursday with large moved fulled by thin trading conditions.
Wide classes of commodities have rallied with supply concerns from Russia-Ukraine conflict.
Efforts by major Chinese nickel producer Tsingshan Holding Group to reduce its short positions spurred LME nickel prices to rocket to record highs above $100,000 a tonne on March 8, after which trading was suspended for six sessions.
Although it is not yet clear whether Tsingshan was back in the market seeking to cover some of its short position, one trader said the dominant short position remained.
The same trader said illiquid market would make such efforts harder and could lead to sharp gains in prices.
Benchmark nickel on the London Metal Exchange jumped by its daily price limit of 15% in early Thursday trade to $37,325 a tonne and was holding at the level at midday.
Earlier, nickel on the Shanghai Futures Exchange shot up by its daily limit of 17% to 233,710 yuan ($36,666.14) a tonne.
Due to low volumes LME benchmark nickel slumped for several days and was hit repeatedly by its lower trading limits after trade resumed last week.
During that period, traders said LME nickel was moving lower towards levels in Shanghai.
Although Russia supplies about 10% of the world’s nickel but Russia’s Nornickel is the world’s biggest supplier of battery-grade nickel at 15-20% of global supply, according to JPMorgan analyst Dominic O’Kane, as reported by Bloomberg.
