Nickel fell by the maximum allowable amount on the London Metals Exchange on Thursday, working backwards from last weeks’ tremendous short squeeze.
Futures for the metal dropped by 8 percent to $41,945 a tonne, on a small smattering of trades. The day before, prices dropped by the previous 5 percent bottom following a week-long suspension of nickel trading after a chaotic week drove nickel up 250 percent in a single day, causing volatility to reverberate throughout the metals sector.
Analysts believe this is a sign that the market is recovering from last weeks’ short squeeze, during which top producer Tsingshan Group Holdings Co. found itself unable to pay margin calls on its $8 billion short position.