By Staff Writer

HARARE – It is a metal many overlook and do not talk about often enough, but has proven to have a bull run with no end in sight. Despite copper getting more headlines, nickel has been the base metal to go throat to throat with the former in a near unbroken rally since April last year, and has begun 2021 with more fire.

In 2021 the base metal demand will be kept high by Chinese demand of the stainless steel, battery component and coin metal according to research.

Three-month nickel on the London Metal Exchange is already up 12.48% since the start of the year, advancing 5.04% month-to-date after January’s 7.44% rise.

ETimes

These gains come in addition to a massive 44% gain from April to December, in a period where September was the only month that recorded a decline in price of 5%. This dip in price coincided with second wave lockdowns caused by the novel coronavirus lockdowns.

Like nickel, copper rallied in 10 of the last 11 months on New York’s COMEX, gaining 64% to reach 3.69 per lb. On the LME though, copper had an unbroken run in that stretch, also rising 64% to $8,105 a tonne.

In nickel’s case, its three-month price on the LME was at $18,348 a tonne on Tuesday.

Sentiment around the world is that nickel price this year will not be dampened by surplus supply. In a metals outlook, Bank of America said it saw nickel maintaining the strong performance in 2021 by trading within the US$17,500 to US$18,000 band.

The BofA research indicated that global consumption of nickel was likely to grow 13.5% in 2021 to reach 2.53 million tonnes, just lagging an estimated 5% growth in world output to 2.64 million.

The negligibly higher output, mostly from top producer Indonesia, might keep a lid on nickel prices but won’t be enough to suppress its rally, the bank said, adding:

“We expect a surplus for 2021. Indonesia is still flooding the global nickel market with nickel units, which should prices in check.”

But BofA also had this to say: “Nickel demand from electric vehicle production should rise in the coming years, providing for strong fundamentals.”

In terms of nickel supply and demand balance Wood Mackenzie, said in an outlook published just before the start of this year that he expected nickel use in precursors for batteries to increase by about 11%, or 20,000 tonnes, in 2021.

However, the company agrees with us that it is still early days for electric vehicle demand, but everyone is excited by it because of the strong year on year growth potential.

“Looking ahead, we believe that nickel demand from the battery sector will accelerate … stimulated by EV-focused policies introduced as part of ‘green’ recovery plans in Europe, strengthening demand from the EV industry in China and the changing political landscape in the US,” the company said.

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