Remember when Nickel went up 250% in a couple days and LME suspended trading? When does Silver do the same?

The unprecedented 250% spike in nickel prices occurred on March 8, 2022, primarily due to a massive short squeeze in the nickel market. Several factors contributed to this extraordinary price surge:

Russian invasion of Ukraine: The conflict raised fears of disruption to nickel supplies, as Russia is the world’s third-largest nickel producer, accounting for about 7.5% of global production (https://www.mining-technology.com/features/nickel-price-surge-2022-markets/). Tsingshan’s massive short position: Tsingshan Holding Group Co., a major Chinese metals producer, had amassed a short position of over 150,000 tonnes of nickel, equivalent to about one-eighth of all outstanding contracts on the London Metal Exchange (LME). Attempt to cover short position: As prices began to rise due to supply concerns, Tsingshan desperately tried to buy nickel to cover its short position, further driving up prices. Market dynamics: The nickel market was already suffering from low liquidity, making it susceptible to large price swings based on relatively small changes in the physical market (https://www.mining-technology.com/features/nickel-price-surge-2022-markets/). Long positions entering the market: Major buyers like Volkswagen, Glencore, and JPMorgan took long positions in response to the geopolitical situation, adding upward pressure on prices.

The price of nickel surged from around $29,000 to over $100,000 per ton in a matter of days. The situation became so extreme that the LME suspended trading and canceled billions of dollars worth of transactions to prevent a potential market collapse (https://www.nortonrosefulbright.com/en/inside-disputes/blog/202403-london-metal-exchange-wins-high-court-battle-over-us12-billion-cancelled-nickel-trades).This event highlighted the vulnerabilities in the nickel market and raised questions about the LME’s oversight and risk management practices. It also demonstrated how a single large player could significantly impact global commodity markets.