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Davenport Laroche
metals Report April 2015
Nickel Rebounds on Concerns of
Reduced Supply
This month’s metal report focuses on the recent
performance of nickel, a metal used in a wide
range of everyday applications. Although nickel
is one of the most common elements found in
the earth’s crust, a large quantity of supply is
inaccessible and resides in the earth’s core. As
the lustrous, silvery-white metal is an integral
component in items that we use on a day-to-day
basis, supply of the metal can have a significant
impact on its price. This was reflected recently
in a report by Reuters, which reported that the
metal hit a one-month high, following concerns
that available supply may have diminished.
Nickel’s Uses
Nickel can be found in everything from
kitchenware to mobile phones, medical
equipment to transport, and construction to
power generators. The metal’s applications
are extensive, however perhaps one of the
most important uses of nickel is in alloys used
to manufacture stainless steel, which usually
contain 8-12% nickel. For more demanding
applications, such as gas turbines and in
chemical plants, these alloys require a higher
concentration of nickel.
Around 90% of all nickel sold each year is used
to make an alloy, with an estimated two-thirds
used in the manufacturing of stainless steel.
Not only does the metal serve many decorative
purposes when used in coatings, such as
‘nickel-plating,’ ‘electroforming,’ ‘electroless nickel
coating’ and ‘chrome-plating’ for example, but
the metal is also essential for catalyzing many
chemical reactions, in order to make the process
more efficient.
One of nickel’s most beneficial properties is its
longevity. According to the Nickel Institute, most
nickel-containing applications have an average
life span of around 25-35 years, with numerous
applications lasting far longer.
Supply and Demand
Nickel uses are estimated to be on the rise,
increasing by around 4% ever year, while
stainless steel containing nickel is growing
by around 6%. With demand for the metal on
the rise, this can cause prices to increase as
a result. Such a correlation occurred recently
when Reuters reported that the price increased
following fears that supply could be dwindling.
Towards the end of April, following forecasts
surrounding increased stimulus in China,
numerous base metals received a boost.
However, nickel’s performance was especially
prevalent as the International Nickel Study
Group stated that the global surplus would
shrink to about 20,000 tonnes this year. This
reduced stock is thought to be affected further
as an export ban on nickel ore by top producer
Indonesia could have a greater impact on
production in China – the world’s second largest
economy and the top global metals consumer.
Thoughts surrounding a Chinese stimulus and
the reduced stock pushed the price of the metal
on the London Metal Exchange (LME). At the
time, three-month nickel rose more than 3% to
a session high of $13,690 a tonne. The steel
ingredient ended at $13,550 a tonne - up from
$13,195 when it rose nearly 4%.
To find out more about the price rise, visit:
http://bit.ly/1GF998D
Or to discover more uses for nickel, visit:
http://bit.ly/19VoMtZ
Address: 1501, Millennium City 5, 418 Kwun Tong Road, Kwun Tong, Kowloon. Phone Number: 2892-7665. Fax Number: 37538919. Email: [email protected]