Friday, August 13, 2010

Nickel: The Rise Of The Silver White Metal

Nickel has been one of the biggest sufferers in the global commodity price meltdown, but this high luster silver-white metal has been making a steady comeback fuelled by investment demand this year mainly driven by massive Chinese imports, and the stainless steel market recovery worldwide. As the global stainless steel production is slowly rebounded towards its highest levels and since stainless steel mills account for over two-thirds of nickel demand, its no surprise that Nickel prices have witnessed a spike in the recent times. As nickel’s chief application is as a constituent of a major building material, nickel use mirrors economic growth.

  • Nickel has jumped about 45% since the start of 2010, while copper and aluminum have risen merely 5%. And since its low point in late 2008, the commodity’s price has more than tripled to $27,500 a ton thanks to strong demand from the stainless steel industry along with supply disruptions.
  • Some 80% of nickel is use to produce steel products - with stainless steel being particularly important. Stainless steels are used in the building industry, automobiles, food & beverages and water industries
  • Nickel is taking off because there has been a huge rise in the demand for everything from home appliances to hybrid cars especially in rapidly emerging markets like China and India.
  • LME nickel stocks are currently sitting at around 116,034 MT, equivalent to around seven weeks of world consumption.
  • Nickel is a primary component in stainless steel and stainless steel is in all kinds of everyday things we use including home appliances and cell phones.

Nickel Global Demand:

Usage of nickel has increased over time and is correlated with economic development. In the past decade world nickel demand increased from 1.009 million MT in 1998 to 1.278 million MT in 2008, a growth rate of 2.4 % per year. However, the upward trend has had peaks and valleys. sia is now the largest regional market for nickel representing 54 % of total world demand. China alone now accounts for 25 % of world nickel demand compared with 4 % ten years earlier.

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