Strong Growth of Nickel Price in 2018
Nickel price was at 10.950 USD per tonne as of October, 10th 2017, whereas today (one year later) is closing at 12.750 USD per tonne. This means an increase, year over year, of approximately 16%.
This year, Nickel registered its highest price on July 6, closing at 15.745 USD/tonne (i.e. 23% higher than today price, and a 43% increase compared to January 2018). A similar price level was reached in April as well, where Nickel closed at around 15.630 USD per tonne. The price trend has been positive from January to July and started to be negative from August onwards. September registered a fluctuating trend, a steep decline at the beginning of the month and a rising curve at the end of the month, a trend that seems to continue in the first two weeks of October.
Why is this happening, and what can we expect in the following months?
A key determining factor of this upward trend is the decrease of the output of nickel ore from the Philippines, the world’s largest supplier of nickel raw materials. The output decreased by more than 10% during 2018 (compared to the 2017 levels), driving a price increase of nickel cathodes this year. President Duterte advised miners to reforest areas where they operate to reduce environmental impacts. In addition, the small-scale mining activities in mountainous regions have been compromised by the Mangkhut typhoon. These production cuts are expected to continue in 2019, as the Philippines have decided to limit the landmines growth due to new, stronger, environmental rules.
Therefore, we recommend manufacturers of stainless steel and nickel alloy primary and secondary product taking a closer look at Nickel in the following weeks and consider a strategic restocking of this raw material, as prices have a growth potential between 20-25% just considering the highest levels reached by the metal in the summer of 2018.