Nickel’s price surges 90% to $100,000 per tonne on LME

Nickel’s price is said to have nearly doubled in value yesterday on the London Metal Exchange surging 90% versus its price on 7 March, when it went up as high as $55,000 per tonne before closing at $48,078. And on 8 March, the price leaped to $100,000, which is almost four times the price on 4 March.
However, the ripple effects may not be seen in the overall economy over during year 2022 as prices driven by a short pinch may not last long. 
Besides, nickel is not used in big volumes. About three-quarters of the world’s nickel is mixed with chromium to make stainless steel, which in turn is mainly used in appliances, machinery and cutlery that are only discretionary purchases.
Meanwhile, there are two types of nickel… nickel traded on the London Metal Exchange is the Class 1 nickel, which must be at least 99.8% pure. But about half of the world’s nickel is less refined Class 2 metal, most of it in the form of products such as ferronickel and nickel pig iron which can be cheaply converted into stainless steel.
Russia accounts for about 9% of nickel supply, but it has closer to a third of the world’s nickel sulfide ore. That gives the status of its exports a huge impact on the price of the Class 1 metal traded on the LME. This grade is also currently most suitable for producing nickel sulfate, a chemical that will have a growing importance in the coming years because of its use in electric vehicle batteries.
Nickel is the most volatile metal with an array of different methods and end-use sectors that interact in often unpredictable ways. Price swings are fundamental to the nickel market, with 90-day volatility over the past 10 years… markedly higher than for other LME-traded metals. There’s a nickel supply boom underway. Commodity analysts predict nickel trading below $20,000 a tonne after the first quarter of this year and not going up those levels until 2025. 

Aruna Gaitonde, Editor in Chief of the Asian Bureau, Rough&Polished