About: Nickel is known to be an abundant element found in nature. In appearance, pure Nickel is a silvery-white metal. It is sometimes combined with other metals also, like iron, copper, chromium, or zinc, to form alloys. It is one of the members of transition metals and is hard and ductile. Nickel alloys are further utilised to make coins, jewellery, or items like the valves and heat exchangers.
Get the latest insights on Nickel's price movement and trend analysis in different regions across the world (Asia, Europe, North America, Latin America, and the Middle East & Africa).
Owing to the Russia- Ukraine conflict, the prices of nickel shot up through the roof in the past few months. However, due to the increasing market volatility and economic downturn, the prices of some commodities have now started to fall. The supply chain disruptions and the delayed shipments affected the domestic inflation outlook in the Indian market. Inflation in India for May 2022 stood at 7.04%, way more than that predicted by RBI.
During the said quarter, the prices of nickel fell around 50.2% from the highs of March 2022. These lower prices are expected to help the manufacturing sector by decreasing input costs, which will help control domestic inflation.
In the Chinese domestic market, the spot price for nickel in June 2022 averaged 188816.67 RMB/MT. Nickel prices showed a downward trend in the Chinese market due to the weakened market demand and the increased supply from the Philippines and Indonesia.
In March 2022, nickel prices soared around 70% in one day on London Metal Exchange (LME). They broke the 100,000 USD/MT barrier due to the supply chain disruptions aggravated by the current geopolitical scenario. However, during the said period, the prices began to fall significantly. This decrease was attributed to the muted demands, which shrank substantially given the market's concerns about the potential economic downturn. Per ton price of nickel averaged 27,760 USD for the said quarter on LME.
The market in India remained weak in the beginning of the first quarter of 2022. Nickel prices in January were around 1564-1740 INR/kg. The market prices however witnessed a gradual incline in February with the prices slowly increasing to 1860 INR/kg by the end of the month. In March, nickel prices rose sharply to 3509 INR/kg but later on declined to 2811 INR/kg.
The benchmark three-month nickel contract plummeted 8% to its new trading limit on March 8th, as significant selling persisted in commodity markets.
The price reached 41,945 USD/MT when trading began. Prices more than doubled in a matter of hours on March 8, surging past 100,000 USD/MT as one of the world's largest manufacturers, China's Tsingshan Holding Group, purchased substantial quantities to hedge its nickel short positions. Trading was suspended as the action exacerbated a price surge that was already accelerating due to Russia's escalating crisis in Ukraine.
The final quarter of the year began with nickel prices hovering around 18,000 USD/MT. Although still below the 20,000 USD/MT milestone hit in July, it marked a year-on-year gain of 25%. Global output fell for the first time since July 2020 in August, according to statistics issued by the World Steel Association, owing primarily to China's production curbs in line with its emission objectives. This, combined with power constraints at Chinese stainless-steel manufacturers, raised concerns about dwindling demand from the Asian superpower, putting downward pressure on pricing.
Prices of the metal rose throughout the first eight months of this year but did not break through the 20,000 USD/MT barrier until September. London Metal Exchange's benchmark nickel futures achieved a seven-year high of 20,392 USD/MT on 10 September. This was due to supply difficulties caused by increased demand from stainless steel manufacturers and manufacturers of batteries for electric cars, as well as insufficient stockpiles. Globally, EV manufacturing is increasing, which will increase the metal’s demand for EV batteries. News that Indonesia was considering imposing an export tax on low-grade nickel, encouraged nickel prices to hover over 20,000 USD/MT for a time. However, prices progressively declined since then to below 19,000 USD/MT, owing to growing fears about the potential of China's economic development faltering in the face of a power crisis and a default risk facing Chinese property giant Evergrande.
Nickel prices are expected to average 15,250 USD/MT in 2022. In December, spot prices remained essentially unchanged, although LME inventories were substantially lower. It is anticipated that prices might fall by the second half of next year.
Indonesia's mined nickel output expanded by 10% to 836,000 tonnes in 2021, up from 760,000 tonnes in 2020, and is expected to reach just under 1.1 million metric tonnes in 2022. The Philippines' production increased to 366,300 tonnes in 2021, up from 333,000 tonnes in 2020. Nickel mining in the Philippines, the world's largest exporter of nickel ore to China, had been steadily rebounding following the government's relaxation of mining industry regulations. Nickel prices in January in China were 21,020 USD/MT. The prices rose to 22,021 USD/MT by February end after which the prices fell during the first quarter reaching 18,828 USD/MT during March. During the second and third quarters, the prices continuously increased with the highest value of 22,490 USD/MT during September.
The metal surged to a roughly seven-year high of 19,000 USD/MT in February 2021, from approximately 17,000 USD/MT earlier this year, as a result of China's rapid economic expansion and supply constraints. However, the surge was short-lived following the announcement by Chinese business Tsingshan Group that it will provide Ni matte for battery manufacture. The discovery alleviated fears about a supply shortage of battery-grade nickel, lowering the price of nickel futures on the London Metal Exchange to 15,945 USD/MT on 4 March 2021 at one point. Nickle prices climbed strongly in the second quarter, increasing 12.6% to the end of June on the strength of fundamentals. Several of the world's largest nickel producers, notably Nornickel and Glencore, had operational difficulties in the first half of this year, further constraining supply in an environment of high demand. Nickle prices remained stable at 19,000 USD/MT due to supply problems. They were oscillating between 18,240 and 19,900 USD/MT in late August-early September 2021, before rocketing to a new high of 20,393 USD/MT
Prices further rose from the December value of 2020 with a sudden jump in Feb reaching its peak at 19,529 USD/MT post which a decline in prices could be observed in March reaching year low value of 14,708 USD/MT, after which prices reached previous high values eventually, with their increase on a month-on-month basis, the September prices crossed the 20,000 USD mark and were at 20,245 USD/MT.
The Indonesian nickel ore embargo combined with a precipitous reduction in Philippine shipments had a substantial impact on Chinese nickel pig iron production, which fell for the second consecutive quarter in March 2020. Nickel prices in China continuously increased for the first three quarters with slight fluctuations, from 12,983 USD/MT in April to 18,500 USD/MT by the year-end of 2020.
Nickel was not immune to the ripple impacts on metal demand induced by 2020 coronavirus pandemic limits. The metal, which is mostly used to make stainless steel, fell to 11,753 USD/MT in April 2020, down from a record of 17,673 USD/MT in September 2019. China's strong economic rebound in the second half of the year became a significant factor in nickel prices, increasing for the remainder of 2020. This pattern persisted through 2021. Additionally, the metal's climb was aided by a restriction on its ore shipments from Indonesia, which took effect on 1 January 2020.
The January prices stood at 11,653 USD/MT post which the prices started to fall from the previous values. The year low value during the march was at 10,794 USD/MT. The prices recovered during the next quarter and continued to rise for the next three quarters reaching the year high value by mid-December at 17,381 USD/MT.
Vale, the world's largest producer of the metal, lowered its 2020 production forecast, citing adverse weather conditions, unplanned outages, regulatory delays, and ongoing logistics issues caused by COVID-19 lockdowns. The production forecast was lowered to 180,000-195,000 tonnes from 200,000-210,000 tonnes. Exports from Czech Republic to Peru totaled USD 12.65 million in 2020 and from India to Peru totaled USD 38.84 thousand.
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Nickel is extracted from the ores of Nickel Sulphides. This extraction process is carried out using traditional roasting. The process includes steps like crushing and grinding of the sulphide ore, which is followed by roasting and smelting. The concentrate is further smelted in the Bessemer converter to obtain a mixture called matte. Then, the resulting mixture is electrolytically or chemically refined to separate impurities (other metals) and finally obtain Nickel.
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The displayed pricing data is derived through weighted average purchase price, including contract and spot transactions at the specified locations unless otherwise stated. The information provided comes from the compilation and processing of commercial data officially reported for each nation (i.e. government agencies, external trade bodies, and industry publications).
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