Nickel prices for stainless steel are rising and reached a two-year high in early May 2014. Bruce Wheeler of Star Stainless pointed out that \u201csince January nickel has risen 35%, making it the best performing metal of the London Metal Exchange.\u201d<\/p>\n
Differing analysts predict higher and lower nickel prices in the coming months, but already there is \u201cone thing for sure, the world of stainless fasteners will begin to see higher prices and longer lead times,\u201d Wheeler told FIN. \u201cThe recent surge of nickel prices has prompted heavy purchasing from the serious stainless buyers causing producers to become very busy and lead times to stretch out.\u201d pricegrid<\/p>\n
Wheeler cited the January export ban of unprocessed nickel laterite ore from Indonesia as starting the nickel price increase. \u201cCombine this with trader speculation of the current situation taking place in Russia and prices have jumped significantly in the last 90 days,\u201d Wheeler told GlobalFastenerNews.com.<\/p>\n
Russia is home of Norilsk Nickel, which is the world\u2019s largest miner of nickel and palladium, Wheeler noted.
\nAnother factor is the Ukraine crisis, which has buyers worried about supply from Russia.
\nFT.com added that a mine shutdown in New Caledonia due to a spill and positive trade data from China also are driving up the nickel price. Nickel buyers in China are \u201cscrambling to secure material for their processing plants\u201d leading speculators to rush in, reporter Xan Rice of FT.com wrote.<\/p>\n
Vale SA halted production at its Goro plant in New Caledonia. The mine was anticipated produce 40,000 tons of the world\u2019s two million tons of nickel during 2014. Glencore Xstrata\u2019s Koniambo mine in New Caledonia was producing at a rate below its 26,000-ton forecast.<\/p>\n
Nickel for three-month delivery on the London Metal Exchange rose as high as $19,786 a ton May 8, 2014 \u2013 topping a peak in March 2012. \u201cThe market wants to be long so any sort of bad news acts as a catalyst,\u201d analyst Colin Hamilton of Macquarie told FT.com.<\/p>\n
\u201cNickel is the one commodity with tangible raw material constraints that people can see at this time.\u201d<\/p>\n
Indonesia supplies up to a quarter of global nickel production and the export ban is comes from high-grade Indonesian ore. The export ban is unlikely to be lifted analysts told FT.com. Most of the Indonesian nickel goes to China to be processed into nickel pig iron.
\nChina\u2019s inventories \u201care expected to run out later this year. There is no alternative supply to the Indonesian ore,\u201d according to FT.com.<\/p>\n
The nickel market frequently has significant price swings. For example, there was a four-fold price increase from late 2005 to May 2007. By the end of 2008 it was back down.
\n\u201cWe don\u2019t yet know the seriousness of the Goro incident or how long the suspension will last,\u201d said analyst Stephen Briggs of BNP Paribas told FT.com. \u201cBut in this market it does not take much to push nickel up.\u201d \u00a92014 GlobalFastenerNews.com<\/p>\n
Courtesy London Metal Exchange<\/p>\n
Nickel 8% of Volume, But 60% of Stainless Cost<\/p>\n
Excerpts from estainlesssteel.com on the history of nickel:
\nThe global nickel market is dependent upon stainless steel production and stainless steel prices are likewise dependent on the price of nickel.
\n\u2022 Though stainless is mostly made of chromium, stainless pricing reacts primarily to nickel as it makes up 60% of cost even though it is only 8% of SS 304.
\nAccording to a historical summary of nickel by estainlesssteel.com, nickel was discovered in 1751, but had limited value until 1820 when it was discovered nickel could strengthen iron. In 1885 the U.S. military found nickel steel create superior guns.
\n\u2022 Wars increase nickel demand and during the Korean war, U.S. production fell short of wartime demand. The U.S. government took control of domestic production until 1957.
\n\u2022 Canada dominated nickel production as the Vietnam war ramped up, but 1969 labor strikes cut production and new mines and plants opened in Australia, Dominican Republic and New Caledonia.
\n\u2022 Nickel became the 7th medal to be traded on the London Metal Exchange in 1979.
\n\u2022 In 1987 stainless steel usage jumped and nickel demand and in Q2 of 1988 nickel produces set a record at $8.17 per pound.
\n\u2022 The collapse of the Soviet Union created a new producer, including today\u2019s largest nickel producer \u2013 Norilsk Nickel.
\n\u2022 After a Canadian rebound in production, faster increasing demand in 1999 surprised producers. Canada\u2019s Inco shut down again due to a strike and also lacked cash to re-open mines. Canada\u2019s Falconbridge had smelter problems and Australia\u2019s Western Mining Corp had to shut down for two months. An extended arctic freeze prevent Norilsk from shipping nickel. As demand exceeded supply, prices rose until 2000.
\n\u2022 The U.S. sold its stockpile of nickel in 1999 and is now 100% dependent on foreign imports and scrap.<\/p>\n","protected":false},"excerpt":{"rendered":"
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