Analysis: What’s Behind Nickel’s Sudden Market Volatility?

The price of nickel futures in China has risen at a steady pace over the last year, as demand grew for the key ingredient used in electric vehicle (EV) batteries.

EV sales, which jumped 160% in China last year, continue to set new monthly sales records, and are expected to maintain their growth in 2022.

But this steady market suddenly turned volatile on Jan. 24, with the price of the nickel contract set to expire in February on the Shanghai Futures Exchange (SHFE) jumping to a record of 182,180 yuan ($28,623) per ton in intraday trade, then falling nearly 7% in the night session. The next day, the price dropped 8% to close at about 165,000 yuan.