Nickel trade back to normal as volatility fades, says MCX’s Chittranjan Rege

Nickel market turbulence of 2022 is behind us, said Chittranjan Rege, Head of Base Metals at MCX, in a conversation with CNBC-TV18. Describing the volatility that followed the Russia-Ukraine war, he said, “March 2022, nickel was a bad dream. This is all behind us.”

Rege noted that the international nickel market has gradually stabilised over the past year, with delivery cycles improving and trading activity picking up. “Progressively, things have improved. Definitely, the contract has also improved,” he said.

He pointed out that inventory levels at LME warehouses are now “pretty significant,” which reflects better availability and stronger market fundamentals. With normal trade and demand-supply dynamics back in play, smelters and factories are once again evaluating margins and production cycles based on prevailing prices. “I think the normal trade and normal demand-supply parameters are back in business,” Rege added.

On the domestic front, MCX has launched a revised nickel futures contract with some important changes. The trading lot has been reduced to 250 kgs, while the delivery lot remains at 1.5 tonnes. Thane will serve as the single delivery centre to avoid confusion. The expiry date of the contract has been shifted from the month-end to the third Wednesday of the month. According to Rege, this will reduce crowding with other contracts and provide investors a clearer opportunity to trade nickel.

Since India imports all the nickel it consumes, Rege expects strong participation from stainless steel producers, traders and SMEs, all of whom require hedging mechanisms. “I am very, very hopeful that we will bring the same value proposition back on the table. And I am sure they will all subscribe to it,” he said.

Watch accompanying video for entire conversation.