FOCUS: What SHFE briquette deliverability means for oversupplied nickel market

摘要

The global nickel market continues to suffer a disconnect between on-exchange activity and market fundamentals, with the appetite for physical material distinctly lackluster, while speculative sights are set firmly on the electric vehicle (EV) battery revolution. Shanghai Futures Exchange nickel prices continue to be volatile despite stagnating stainless steel and EV demand for nickel because of the Covid-19 pandemic. The arbitrage between the SHFE and the London Metal Exchange remains negative, having been closed since May, with some analysts pointing to a disconnect between the two – the SHFE’s open interest has increased by 18% since March while the LME has seen a reduction of 10%.