Nickel prices renew run-up towards record high above $50,000 amid supply fears

• Nickel prices rally around 10% on LME, Futures on Shanghai refreshed record top.
• LME registered nickel inventories drop to the lowest since 2019.
• Russia-Ukraine woes continue challenging global supply chain, especially related to commodities.
• Metal buyers stay hopeful with eyes on geopolitical headlines, US CPI.

Nickel prices pay a little attention to the recently improved market sentiment as the 3-month contract on the London Metal Exchange (LME) rises around 10% to $53,000 during Tuesday's Asian session. That said, the metal’s April contract on the Shanghai Futures Exchange refreshed an all-time high of 228,810 yuan ($36,255.74) a tonne amid the early day trading.

That said, nickel prices shot around 90% the previous day on LME to refresh the record top to $55,000, before closing with around $66.00% daily gains.

The quote’s latest upside could be linked to the depleting inventories and rising fears of a supply crunch due to the Russia-Ukraine tussles.

While portraying the inventory data, Reuters said, “Inventories of nickel in LME-registered warehouses are at their lowest since 2019 at 76,830 tonnes.”

It’s worth noting that Russia supplies 10% of the global nickel demand, majorly used for stainless steel and electric vehicle batteries. Hence, Russia’s invasion of Ukraine and global sanctions do challenge the major commodity producer, as well as the supply cycle.

Recently, no major progress in the Russia-Ukraine talks and Moscow’s continues invasion of Kyiv weigh on the market’s sentiment. As per Reuters, “Ukrainian officials said a Russian airstrike hit a bread factory in northern Ukraine on Monday, killing at least 13 civilians, while talks between Kyiv and Moscow made little progress towards easing the conflict.”

Amid these plays, nickel prices are likely to remain firmer towards refreshing the all-time high. However, any positive surprise from either Russia or through the exchange data, won’t be taken lightly.

Also important will be Thursday’s US Consumer Price Index (CPI), as well as chatters surrounding the US dollar and the Fed.