LME and Ni inventories The thing that's been bothering me for a few months as I've watched LME Ni inventories fall is parallels to fall of 2019 when Tsingshan last mucked around with the market (see link I've included at bottom). That was the last time we had Ni inventories below approx 80k tonnes on the LME. Recall it was revealed in Oct / Nov 2019 that Tsingshan had bought huge amounts of inventory (actually the same approx number - 150k tones) and as per the article I have included, was attempting to corner the market. Xiang Guanda did this with advanced knowledge that Indonesia was going to ban exports of unprocessed Ni ore. He at the same time was rapidly building his refining capacity in that country. Anyways, if you look at a 5 year LME Ni inventory chart, you will clearly see this draw down. What you will also see is an abrupt reversal when the position was unwound. And we now know 2/3 years later he has taken a massive position on the opposite side related to his plans to massively increase production of refined Ni/Matte. Incidentally the LME did announce an investigation into all this at that time. Anyways, during this 2019 episode, prices didn't spike anything near what we have just seen. Prices however fell pretty quickly from about $8 back to $5 and languished for at least a year before the steady rise (and steady draw down) we have seen for the past 12-18 months. So, my concern is given how repeatedly and how easily we have seen LME Ni manipulated, and how significantly prices have fallen after prior much milder attempts at manipulation, we might be in for some duldrums.... I get we are in a structural supercycle now etc and am very positive long term on Ni prices, but I wouldnt be suprised it turns out we take a bit of a breather..... As for the stock, I think it will weather this all perfectly fine and will continue to gain support as numbers start turning positive for its financials...
https://www.mining.com/web/is-china-locking-up-indonesian-nickel/