Why is nickel trading like it’s 2008?

(Reuters) by Andy Home – On the London Metal Exchange (LME) benchmark nickel for three-month delivery is currently trading around $10,000 per tonne. Which, as with all the other industrial metals traded on the LME, is the lowest it has been since the Global Financial Crisis in 2008-2009. But whereas the likes of copper and aluminum are still comfortably above the troughs recorded during the worst of the manufacturing meltdown that followed the financial meltdown, nickel is actually there. Nickel hit a low of $9,100 during its “flash crash” of Aug. 12, within spitting distance of the low of $8,850 recorded in October 2009, the month after the fateful “Lehman Moment”. It’s an extraordinary outcome for a metal which, unlike most of the rest of the LME complex, is experiencing both a structural tightening of supply and a growing number of price-related supply hits. So is nickel the victim of irrational fear and panic, a collateral casualty of the financial volatility that has rippled out from collapsing Chinese stock markets? Or are there good reasons for it treading the same ground as during the last period of global market disorder? STOCKS UP, PRODUCTION UP… One key difference between now and … continue reading

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