A ‘return to normality’ at the London Metal Exchange (LME) after the nickel crisis of 2022 has been asserted by a member of the LME nickel committee.

Alberto Xodo told delegates at the BIR convention in Copenhagen that ‘liquidity had returned to the contract. He said open interest had been rising over the previous six months and was now close to March 2022 levels while overall volumes were also returning.

Following an early disconnect in the wake of the crisis, convergence had been restored between prices on the LME and the Shanghai Futures Exchange, Xodo added.

The markets were shaken in March 2022 when nickel prices on the exchange doubled within to above US$ 1 000 per tonne within hours. The LME suspended trading for over a week.

Back to life

For Xodo, the turnaround reflected not only ‘the value companies attach to protecting themselves’ but also the measures put in place by the LME to prevent a repeat, including the introduction of 15% upper and lower daily price limits for all metals. ‘The contract seems to have come back to life,’ he said.

The Copenhagen session of the stainless steel and special alloys committee also featured a presentation from Yuriy Vlasov, senior analyst at CRU, who noted that stainless steel accounted for a 15% share of total steel scrap demand by revenue despite its significantly smaller volumes when compared to carbon steel.

Europe and US ‘stable’

Vlasov contended that China and Indonesia would be the drivers behind a projected 3.9% CAGR for stainless slab production in the period until 2028. Europe and North America would be ‘relatively stable”, he added.

Stainless scrap would continue to experience ‘very strong demand’ in the USA and Europe whereas emerging markets would rely more on other raw materials.

Courtesy : Recyclinginternational.com