Nickel May Gain as Stockpiles Fail to Deter Funds: Chart of Day

Nickel, which surged 17 percent the past month, may advance further as “price momentum” and inflation expectations lure fund managers even as stockpiles of the metal approach a 14-year high, according to Commerzbank AG.

The CHART OF THE DAY shows the price of nickel and open interest on the London Metal Exchange. The lower panel tracks inventories in metric tons. The price jumped to its highest level for a year on Aug. 13 and open interest was a record 147,117 contracts on Aug. 14, according to LME data. Stockpiles of the material used to protect steel from corrosion are close to the highest since 1995 amid weak demand in the construction and transportation industries.

“I find the one-way, very dramatic price rise in all metals anomalous given the shaky fundamental basis and rising LME inventories,” Eugen Weinberg, a commodity analyst with Commerzbank in Frankfurt, said in an interview Aug 18. “The price momentum behind metals is so strong that the market is attracting external players.” (more)