The unprecedented rally in LME nickel prices in mid-March, when prices surged to over $100,000 /t and led the exchange to suspend trading, impacted global stainless markets in the last few weeks, with all-in prices for austenitic grades rising across all regions. The LME price spike was mainly a result of sizeable short covering in an illiquid market. Although LME nickel prices have declined, now hovering at around $33,000 /t, we expect them to remain volatile and elevated until the short position is covered. Tsingshan, which is understood to hold a large short position, has switched some of its furnaces to produce nickel matte instead of NPI. As a result, stainless production in Indonesia fell significantly in March.
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