09 Jun The many forces driving nickel price volatility
Bullish sentiment about nickel demand, particularly for electric vehicles, compared with long timeframes needed to increase mine supplies, has driven prices higher. But continuing uncertainties about the future timing and extent of nickel demand and supply growth have created a volatile market, reports Gregory DL Morris at Fastmarkets.
While the long-term outlook for nickel is strong, uncertainties about the near-term supply-demand balance for the metal have created volatility recently.
There is still great excitement over the vast potential for new demand in batteries for electric vehicles (EVs).
There is also interest in the substantial production potential for a new combination of processes that major Chinese nickel supplier Tsingshan has developed at the company’s operations in Indonesia.
Most sources agree that both the new demand and new supply will be real but there is significant uncertainty about the timing, extent and economics of the trends for nickel. As a result, market prices for the metal have been very volatile. Market expectations of robust demand drove the price upward over the last year, but confident reports of future increases in supply from Tsingshan encouraged demand to fall back by about 20%.
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