LME nickel highs driven by speculators – Eramet
The recent record-high nickel prices on the London Metal Exchange were driven by speculators and could return to lower levels "at any time" as the physical market reaches balance, French metals and mining company Eramet SA said Thursday.
LME nickel prices "pursued exceptionally steep growth" in July and August, hitting an all-time high of $30,000 a metric ton on Aug. 23.
"This reflects strong speculation, while the physical market should be close to equilibrium in 2006, which could mean a return by nickel prices to lower levels at any time," the company added.
LME nickel is currently trading around $28,400/ton. Extremely low nickel stocks and strong demand from the stainless sector have combined to push the market higher this year.
At the same time, LME data have revealed that one player or a consortium of players holds a large net short position on the LME.
LME data, originally based around the September date, now show this position has been rolled forward to the November delivery date.
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