Nickel futures fell over 7.0% on Thursday, extending a 9% slump in the previous session after the London Metal Exchange (LME) said on Wednesday that the initial margin required to trade nickel will be raised to $6,100 per ton after Friday’s market close, a 28% increase over current levels. The exchange implemented controls to limit the size of intraday price swings since March, when prices rose 250% over two days as brokers raced to close out bearish bets held by top producer Tsingshan Holding Group Co. and other clients.
"The LME notes the current volatility in nickel," the exchange said in a statement. "The price limits in place are functioning as expected and the LME is undertaking enhanced monitoring to ensure that participants' trading activities are being conducted appropriately."
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Create account Try a demo Download mobile app Download mobile appOther industrial metals such as copper and zinc have also taken a hit during today's session, however the scale of declines is narrower.
Nickel price rose nearly 40% since the beginning of November and reached its highest level in six months amid hopes that the Chinese government will ease Covid restrictions. However recent LME actions sparked another wave of sell-off. During today’s session price broke below key support at $26300, which is marked with lower limit of the 1:1 structure, 200 SMA (red line) and 38.2% Fibonacci retracement of the last upward wave. Currently price is approaching local support at $24700, which coincides with 50.0% Fibonacci retracement and previous price reactions. Source: xStation5
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