Greenspan would be green with envy

Almost entertaining if it would not be so serious
While it was said that when Alan Greenspan, the former chairman of the US Federal Reserve, coughed, the stock and forex markets would react, then for Donald Trump there is a totally different level of escalation. Even should just a whisper or a hint of a something be made on the social media platform, Truth Social, a full-blown reaction follows. Even though the credibility of his statements is sometimes unclear even within his own administration and should be debated, the US President sends the markets mercilessly in one direction or another almost every day.

This is a particular novel and undoubtedly disruptive political model, especially if, as rumours suggest, it might also be linked to financial interests within a close or wider circle. However, it could also be fake news from the opposition and its associated media. What this sometimes naïve author, now of advanced age, has had to learn again in recent years about the identity of the United States of America and the way it ‘ticks’ is considerable, but not necessarily only positive. In any case, it is certainly true that in the USA, the benchmark for words and statements is definitely different to that in old Europe. Almost everything in the political field is PR or a negotiating tactic, and so truths are not absolute, but rather alternative.

If the consequences would not be so wide-ranging, sometimes even fatal, then it could be officially acknowledged that the present situation has considerable entertainment value. The high frequency of media reports in almost every corner of the world proves this. And in addition, every statement still has a fascinating impact on the financial markets, which clearly confirms the United States of America’s continuing position of factual, political and military power. If a small state’s government would behave in this way and make such comments, then probably not even its own news agency would consider it worth a headline. If, on the other hand, Donald Trump’s Presidency would be just a work of fiction, the series could be shown on Netflix attracting viewing figures in the billions, albeit voluntarily.

Since the start of the war on the 28th February 2026 between the USA and Israel on the one side against Iran on the other, the price for the industrial metal nickel, important for battery and stainless steel production, has traded in a surprisingly narrow range. The price on the London Metal Exchange (LME) has been between USD 16,400.00/mt on the downside, and a little over USD 18,000.00/mt on the upside. Considering the economic uncertainties and the feared impact on demand, this is remarkable and shows the strong fundamental support for the prices.

Supported by the present cease-fire, and the hope of an ending to the war through negotiations, the market is again setting its sights on the upside. At editorial deadline, the price for the 3 months future was around USD 18,300.00/mt. The fact that the US-dollar against the Euro, and also other important currencies, has weakened, due to the change in Hungary from Orban to Magyar, certainly also plays a role. And last but not least, also playing a part is that China, according to a report, is considering a halt to sulphuric acid exports from May (see also below).

However, as far as analysts are concerned in their predictions for the nickel price in 2026 and 2027, their uncertainty seems to be just as great as their eloquence. The forecasts from November 2025 are being quickly revised by almost USD 2,000.00/mt on the upside, for example, from USD 15,300.00/mt to USD 17,750.00/mt for 2026 and for the following year, from USD 16,125.00/mt to USD 17,278.00/mt, which, as a colleague writes, is the same as saying: “I’ll take today’s rate plus/minus USD 500.00/mt.” Of course, the forecasters can justify the reasons for the revision.

In a publication from 30th March 2026, J.P. Morgan (JPM) anticipates a higher bottom price. This means that the expected downside of the market, which is also the price support level, is being pushed higher due to the strongly reduced mining quotas in Indonesia. However, it remains the view that the surplus in primary nickel will initially continue in 2026, even if nickel supply reduces by 3% this year.

Even if a certain risk remains that Indonesia will not quite keep to its adopted hard line, and there could, therefore, be upward revisions in quotas in the second half of the year, JPM’s market observers, in order to defend and support this higher bottom level, are convinced that the government will remain flexible in regard to its distribution of licences. The conflict in the Middle East certainly presents a risk for demand, but it is expected that nickel prices could follow a V-shaped price trend, above all due to the immense risk in the sulphur supply chains.

Sulphur, or rather sulphuric acid, is an important material used in certain common processes (HPAL – High Pressure Acid Leach) in primary nickel production, in which the nickel metal is leached from the ores using sulphuric acid and pressure, thereby extracting it. Sulphur is a chemical which is produced in large quantities as a by-product in oil refining and gas extraction in the Middle East.

Initially, therefore, in the absence of any signs of an end to the war, or perhaps even a further escalation, the downside of nickel prices was tested because of the general impact on demand. After a certain period, however, the factor of a sulphur supply crisis would assert itself and could turn the nickel market into a deficit. This would cause prices to rise again. As always, there are alternative paths of development, but this one is certainly not lacking in logic.

CBAM price for Q1 2026 published – criticism about lack of transparency
The European Commission has, for the first time, published the certificate price for the Carbon Border Adjustment Mechanism (CBAM). According to the Commission, the price is 75.36 Euro per tonne CO² for the first quarter of 2026.

However, there has been much criticism in how the pricing has been set, above all, about the lack of transparency. While the Commission has pointed out that the calculation was based on publicly available data, there is a lack of specific details regarding the joint auction platform used or the exact data source.

Additionally, it is criticised that the underlying data used appears to be available mainly via the European Energy Exchange (EEX), where the public only has limited information and access is often behind paywalls. This increases the impression that the CBAM is unnecessarily complicated and has been designed with little transparency.

The organisational structure of the instrument is also viewed critically. The fact that the CBAM falls under the Directorate-General for Taxation and Customs Union (DG TAXUD) rather than – like the EU Emissions Trading System – under the Directorate-General for Climate Action (DG CLIMA) is seen by critics as an indication that the CBAM is more of a tax than a traditional climate policy instrument.

While the mathematical formulae for the calculation of the CBAM costs have been published, the specific calculation method and the exact data sources used to determine the price are still unclear. Therefore, the question remains as to how the figure of Euro 75.36, which has now been published, was actually arrived at.

Rising fuel prices and the conflict in the Middle East – are electric cars coming back into fashion?
The global rise in fuel prices in connection with the Iran war and the resulting shock in oil supplies has caused governments to make a new valuation of their energy security and policy. China’s export statistics could also point to consumers reconsidering their decisions regarding mobility, since China’s export sales of electric and hybrid vehicles rose by 140% to 349,000 in a year by year comparison (Bloomberg).

The almost total blockade of the Strait of Hormuz, an important transit route for oil and gas transports, has pushed the oil price to over 100 dollar per barrel, and both industry and consumer have been hit hard. According to reports, some countries have already taken emergency measures and the supply shock has inevitably renewed discussions about energy diversification, off-shore expansion of renewable energies and a reduced dependence of oil and gas in transport and infrastructure.

The media has reported that interest in electric vehicles has increased as a consequence of the impact of the Iranian conflict. In March, sales of used electric vehicles surged (Reuters), new registrations of electric vehicles in Great Britain reached record highs (UK car registrations), while registrations in South Korea even doubled. In addition, Reuters reported that BYD, a leading manufacturer of electric vehicles worldwide, saw an increase in demand in the export market (Reuters).

The current momentum in EV sales could be boosted by the “recency bias” resulting from the supply shock in the Middle East, although potentially lower fuel prices could reduce the urgency to move away from petrol and diesel. The recency bias is a cognitive bias whereby people give recent events or information an unproportionally high importance. The domestic sales in China, however, fell by 14% in March (Bloomberg), while European car manufacturers reduced their EV investments due to stagnating sales and profitability. This points to demand, adjusted for recency bias, continuing to remain subdued in the important established markets.

A costly tariff with huge consequences: Why America’s aluminium strategy is failing
The US government wanted to strengthen its domestic aluminium industry by implementing high tariffs. In reality, however, it has only achieved the following: higher prices, weaker supply chains and additional burdens on American companies.

During his first term of office in 2018, Donald Trump had already introduced a tariff of 10 percent on aluminium imports within the framework of the “section 232” trade expansion act. Last year this was increased to 50 percent, and exceptions for close allies, such as Canada, were withdrawn and the measures were expanded to cover numerous processed products – from tin cans to industrial cables.

The consequences have been clearly seen. While aluminium imports into the USA have indeed noticeably reduced, the revival of domestic production, which had been the hope, has not happened. Generally, aluminium is one of the most energy intensive industrial metals. The high electricity prices in the USA, as well as heavy competition for available energies – for example from technology centres and AI applications – have made production unattractive.

In the past, quite a few US smelters were forced to close, amongst others, in Washington, Missouri and Kentucky. At the moment in the United States there are only four primary aluminium smelters in production, of which just two are working at full capacity. A new plant in Oklahoma is actually being planned, but will not be in operation before 2030.

This results in the USA still being heavily reliable on imports. According to the US Geological Survey, aluminium imports recently covered about 60 percent of American consumption. At the same time the tariffs on the metal increased substantially. This is especially noticeable in the “Midwest Premium”, which is the premium on the price an American buyer has to pay on the London Metal Exchange. This premium, since the introduction of the 50 percent tariff, has more than doubled.

The situation has worsened since the conflict with Iran. States in the Persian Gulf produced about eight percent of global aluminium. Large amounts of aluminium, bauxite and clay are normally transported through the Strait of Hormuz. However, important production capacities have been lost due to attacks and supply disruptions, including in Bahrain where the world’s biggest aluminium smelter is to be found.

For American companies, this has created a double burden. They are not only paying the higher prices, seen throughout the world, but also the higher domestic surcharges. Aluminium has, therefore, become more costly in various branches – from canned drinks and household goods to the car, aerospace and defence industries.

It is especially problematic as the USA would have an ideal partner at its doorstep with Canada. Canada has cheap hydropower at its disposal and has traditionally been the most important aluminium supplier to the United States. But the higher tariffs have led to Canada’s producers turning more to Europe. For example, the share of sales to Europe for Aluminerie Alouette Inc. – the biggest aluminium smelter in North America – rose within a few months from four to 57 percent of its production.

One thing is clear: The US aluminium tariffs have failed to achieve their goal. Instead of improving supply security, they have actually increased the dependence on unstable supply chains. For American consumers and companies, this course of action will, therefore, remain costly for a long while.

Big announcement, unanswered questions: China’s commodity exchanges new opening up move
China is taking a further step in extending its influence on global commodity markets. In future, access to Chinese futures on nickel and lithium carbonate should be made available to foreign investors. This was announced in a statement by the China Securities Regulatory Commission (CSRC). A total of 14 futures and option products are to be opened to international capital. A specific starting date has, however, not yet been announced.

So far, nickel futures have been traded on the Shanghai Futures Exchange (SHFE), while lithium carbonate is listed on the Guangzhou Futures Exchange. Both contracts are among the most liquid products on China’s Futures Exchanges, and, due to their importance for batteries and energy transition, are of great global significance.

China is the world’s biggest customer for many raw materials, yet international reference prices have so far mainly been determined in financial centres such as London and New York. By opening up its futures markets, Beijing wants to gain more influence on price formation. At the same time this move is in line with the strategic goal of strengthening the renminbi as an international trade and reserve currency.

Tiger Shi, managing partner of the broker house BANDS Financial Ltd., said “This is an important step”. He also considers it possible that more restrictions could be lifted for foreign investors for other metals in the future, such as copper, aluminium and zinc – in accordance with the internationalisation strategy of the SHFE.

The Exchange had already presented such a plan last year. This envisaged, amongst other things, that foreign market participants could deposit foreign currencies as security for yuan denominated transactions. Capital movement controls have so far been considered as one of the main reasons why China, despite its market power, only plays a limited role in global pricing.

China’s previous attempts at opening up have, however, had mixed results. The Shanghai International Energy Exchange has been offering foreign investors crude oil contracts since 2018 and copper contracts since 2020, albeit without decisively breaking the dominance of western trading places. The accessibility to the iron ore futures on the Dalian Commodity Exchange in 2018 was a little more successful. It remains to be seen whether nickel and lithium take a similar path.