The three-month futures price of nickel on the London Metal Exchange (LME) surged by US$995/ton yesterday (January 11), closing at US$21,794/ton, and the highest intraday hit US$21,850/ton. The spot price also hiked greatly by US$1,057/ton, reaching US$21,986/ton.

LME nickel price has cumulatively hiked by US$1,411 in the past three days, with an increase of 7%.

The current monthly average nickel price is US$21,048/ton, higher than the US$20,015.5/ton in the previous month.

Meanwhile, LME’s market inventory of nickel has dropped for 50 days in a row, down by 214 tons on January 11, reaching 97,744 tons. The decrease in January has amounted to 2,142 tons.

The surge in nickel prices was mainly due to the continued decline in market inventories. The LME inventory has dropped for the longest period since 2000. Besides, Tesla inked a contract with Talon Metals for nickel ore purchases, which triggered market concerns on tight supply, leading to a sharp increase in nickel prices. The current nickel price has hit the highest since February 2012.