Understanding the Fickle Nickel Market

The nickel market can be very confusing. After all, last year, nickel performed the worst out of any base metal on the market, yet at the very same time nickel consumption was on the rise. This may sound somewhat paradoxical, but it is actually just a simple case of supply outweighing demand.

Whilst demand for nickel has increased somewhat significantly, the supply of it simply happens to have increased even more. In turn, you might expect producers to cut back, but in certain areas of the world, profit can still be made even as prices drop, and therefore, just because the price of nickel may have fallen, it does not necessarily mean that it is bad news for anyone involved.

It is not just supply and demand that is having an effect on the price of nickel or indeed how profitable it can be. Instead, new technologies and the introduction/removal of export and import restrictions are also going to have a major impact, and in turn the lower cost of production is currently making this demand and supply disparity bearable for suppliers.

However, as anyone in the industry is well aware, past prices and future prices can have very little in common, and nickel price forecasts are likely to still be needed by both those with nickel to sell and those in the market for buying the base metal. As such, no matter how nickel performed last year, the future, and indeed how those performance statistics actually relate to real life sales, will be less clear cut, and understanding current predictions will be more beneficial than simply understanding the past.

Post Comment