We wanted to bring everyone up to speed on a major development regarding nickel. Roughly one week ago, we sent out our 1Q update in which we discussed how nickel rallied to $11/LB. We were concerned it would go even higher, and we were expecting major increases in surcharges. Nickel jumped 250% higher to $50/lb in the last two days. ($100K per ton), which was an unprecedented increase. The London Metals Exchange (LME) halted trading on nickel last evening and canceled contracts traded during the overnight hours. They have now announced trading will be halted until at least 03-11-22, maybe longer. Attached are some announcements and a Bloomberg report that explains the current situation.
We do not believe the $50/lb. number will hold. There is a short squeeze going on of historic proportions. The question is, where will nickel end up once the dust has settled.
As of today, all our mills: Raw material, Finished Wire, Finished Bar, have all stopped offering material in the market. We are also seeing our master distributors not quoting. Everyone is taking a wait-and-see approach.
Until we see where nickel starts trading and we get updated offers on raw material, Vendors will not be able to quote other than unsold items in stock. We will keep sending out updates as we get them. Our goal is to make this interruption as short-lived as possible.