Signs of impending climate change have hovered over the nickel market for some time. Consumption has been slowing with the downswing of the stainless cycle and supply, mainly of nickel pig iron and scrap, has been rising strongly. The only surprise is that LME stocks have not increased more rapidly. Since the low point of 2,982t, LME inventories have climbed by 7,098t to reach 10,080t on July 11~(th). Though still extremely low by historical standards, the gradual upward trend in stocks coupled with the alteration to the LME's lending guidance for nickel have been sufficient to bring about a sharp correction in prices. The LME 3-month quote has fallen by 17,400 dollars/t since mid-May to a level of 33,050 dollars/t and the hefty backwardation of nearly 4,000 dollars/t has almost disappeared.
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