Investing in Nickel

Nickel is an important metal used in making stainless steel and other specialty metal alloys.

Domestic Production and Use: The United States did not have any active nickel mines in 2009. Limited amounts of byproduct nickel were recovered from copper and palladium-platinum ores mined in the Western United States. On a monthly or annual basis, 111 facilities reported nickel consumption. The principal consuming State was Pennsylvania, followed by Kentucky, West Virginia, and Illinois. Approximately 45% of the primary nickel consumed went into stainless and alloy steel production, 39% into nonferrous alloys and superalloys, 11% into electroplating, and 5% into other uses. End uses were as follows: transportation, 32%; chemical industry, 14%; electrical equipment, 10%; construction, 8%; fabricated metal products, 8%; petroleum industry, 8%; household appliances, 6%; machinery, 6%; and other, 8%. The estimated value of apparent primary consumption was $1.32 billion.

Recycling: About 63,500 tons of nickel was recovered from purchased scrap in 2009. This represented about 42% of reported secondary plus apparent primary consumption for the year.

Import Sources (2005-08): Canada, 44%; Russia, 15%; Australia, 9%; Norway, 9%; and other, 23%.

Government Stockpile: The U.S. Government sold the last of the nickel in the National Defense Stockpile in 1999. The U.S. Department of Energy is holding 8,800 tons of nickel ingot contaminated by low-level radioactivity plus 5,080 tons of contaminated shredded nickel scrap. Planned decommissioning activities at former nuclear defense sites are expected to generate an additional 20,000 tons of nickel in shredded scrap.

Events, Trends, and Issues: In late 2008, the United States was in a severe recession. U.S. raw steel production collapsed in the fall of 2008, and by yearend, capacity utilization at U.S. steelworks had dropped to 41% from the January-August plateau of 90%. The niche market for stainless steel, only 2% of total U.S. steel consumption, fared somewhat better than the much larger market for carbon steel. U.S. production of austenitic (nickel-bearing) stainless steel slipped to 1.29 million tons in 2008, only 4% less than the 1.35 million tons in 2007. Stainless steel has traditionally accounted for two-thirds of primary nickel use worldwide, with more than one-half of the steel going into the construction, food processing, and transportation sectors.

The European Union produced 5.79 million tons of austenitic stainless steel in 2008, followed by China with 5.40 million tons. By February 2009, the recession had spread globally, causing both world sales of stainless steel and the price of nickel to plunge. The global steel industry produced only 10.8 million tons of stainless steel in the first half of 2009, 27% less than that in the first half of 2008.In March 2009, the London Metal Exchange (LME) cash mean for 99.8%-pure nickel averaged $9,693 per metric ton ($4.40 per pound), compared with $27,680 per metric ton ($12.56 per pound) in January 2008. In the third quarter of 2009, the global economy stopped contracting and slowly began to turn upward—in part owing to stimulus programs funded by at least 23 National Governments.

In October 2009, the LME cash mean averaged $18,520 per metric ton ($8.40 per pound), up 91% from the mean for March 2009. At yearend 2009, high unemployment and tight credit continued to hobble several of the more developed economies, weakening demand for nickel. A leading nickel producer halted production at its new Ravensthorpe Mine in Western Australia after nickel prices dropped sharply and has put the $2.2 billion operation up for sale. Several competitors suspended or slowed work on greenfield nickel mining projects in Canada, Guatemala, Vietnam, and Zambia. Mine development and construction of downstream facilities, however, continued at laterite projects in Brazil, Madagascar, and Turkey.

Nickel prices remained subdued throughout the summer of 2009, despite a labor strike at a key nickel smelting and refining complex in Canada. Several North American automobile manufacturers were in financial trouble and began switching production to smaller, more fuel-efficient vehicles to boost sales. Some dealers had to put buyers on waiting lists for the more popular hybrid motor vehicles. Nickel-metal hydride batteries continued to be widely used in the latest hybrids, despite inroads made by lithium-ion batteries. Financially strapped airlines cut back, postponed, or canceled orders for new aircraft, reducing demand for nickel-based superalloys. Environmental concerns and increasing prices for natural gas have triggered a renaissance in the nuclear power industry. The U.S. Nuclear Regulatory Commission was actively reviewing 13 applications from utilities wanting to construct 22 new nuclear reactors—facilities that would require sizeable amounts of austenitic stainless steel and other nickel-bearing alloys.

World Resources: Identified land-based resources averaging 1% nickel or greater contain at least 130 million tons of nickel. About 60% is in laterites and 40% is in sulfide deposits. In addition, extensive deep-sea resources of nickel are in manganese crusts and nodules covering large areas of the ocean floor, particularly in the Pacific Ocean.

Substitutes: To offset high nickel prices, engineers have been substituting low-nickel, duplex, or ultrahigh-chromium stainless steels for austenitic grades in a few construction applications. Nickel-free specialty steels are sometimes used in place of stainless steel within the power-generating and petrochemical industries. Titanium alloys or specialty plastics can substitute for nickel metal or nickel-based alloys in highly corrosive chemical environments. Cost savings in manufacturing lithium-ion batteries allow them to compete against NiMH in certain applications.

Nickel Producers
Anfield Nickel (CVE: ANF) - Mayaniquel nickel project in Guatemala
BHP Billiton (NYSE: BHP) -
Continental Nickel (CVE: CNI)
Cubaniquel - Cuban nickel producer
European Nickel (LON: ENK) - Caldag nickel project in Turkey
First Nickel
FNX Mining - This Canadian mining company primarily operates in the Sudbury Basin, which produces about 30% of the world's nickel.
Franconia Minerals (TSE: FRA)
Gunson Resources (ASX: GUN) - Fowlers Bay nickel project
Independence Group (ASX: IGO)
Western Areas (ASX: WSA)
Ji Lin Ji En Nickel Industry Co. (SHA: 600432) - Nickel sulfate, nickel chloride, electrolytic nickel, high copper-nickel,and nickel hydroxide.
Jinchuan Group
Lundin Mining (NYSE: LMC) - The purchase of Rio Narcea adds nickel to their metal portfolio
Minara Resources (ASX: MRE)
Mincor Resources (ASX: MCR)
Mirabela Nickel (TSE: MNB)
Norilsk Nickel (OTC: NILSY) - The Russian nickel giant also produces copper, palladium, platinum, silver and gold, along with byproducts like cobalt, rhodium, iridium, and ruthenium.
North American Nickel (CVE: NAN)
North American Palladium (NYSE: PAL)
Regency Mines (LON: RGM)
Rio Tinto (NYSE: RIO) -
Special Metals Corporation - Produce specialty nickel alloys and cobalt alloys.
URU Metals
Vale (NYSE: VALE) - - With their acquisition of Inco, they became a global leader in nickel production.
Ventnor Resources - Warrawanda nickel project in Pilbara, Australia
Victory Nickel
White Cliff Nickel (ASX: WCN)
Xstrata (LON: XTA) -

Nickel price chart -

International Nickel Study Group -
European Nickel Industry Association -

(wiki) - Nickel on Wikipedia

Nickel News
2011-07-05 - (bl) - Nickel stockpiles on LME fall to lowest in almost two years
2011-07-04 - (reu) - Philippines says can ship more nickel to China
2011-06-27 - (sa) - Nickel, stainless steel prices on a slide
2011-06-24 - (reu) - Philippines' Nickel Asia sees 20 pct rise in sales volume
2011-06-24 - (tm) - New start hope for nickel mine
2011-06-23 - (reu) - Minmetals sees potential restart, sale of nickel mine
2011-06-23 - (pi) - Cadillac Ventures rallies on copper, nickel drill results from K1-1 deposit at Thierry
2011-06-23 - (co) - MCX Nickel drops on global cues
2011-06-23 - (bs) - Nickel futures down on weak global cues subdued spot demand
2011-06-22 - (mw) - North American Nickel announces assay results from exploration on its Woods Creek nickel-copper-cobalt-pgm propert, Sudbury Area
2011-06-22 - (cmj) - Nickel mining: CaNickel revives Bucko Lake
2011-06-22 - (reu) - Underground operations halted at Zambia nickel mine
2011-06-22 - (wsj) - Nickel is no guide to base-metal prices
2011-06-17 - (reu) - European nickel premiums ease, demand worries weigh
2011-06-16 - (ft) - Nickel falls victim to coming wave of supply
2011-06-16 - (mw) - North American Nickel announces discovery of quartz diorite dyke in outcrop within the Whistle Offset Structure on Post Creek Property, Sudbury, Ontario
2011-06-14 - (bl) - Nickel's floor probably isn't $20,000, Macquarie's Lennon says
2011-06-14 - (reu) - Chinese nickel prices seen down, investors may stock up-trade
2011-06-13 - (bw) - Nickel plunging into bear market on biggest glut in 4 years
2011-06-10 - (bw) - Norilsk seeks iron, copper to curb 'dangerous' nickel focus
2011-06-10 - (sa) - The ultimate guide to nickel investing
2011-06-08 - (bl) - Nickel pig-iron output in China seen surging in challenge to refined metal
2010-11-25 - (bl) - Posco to reduce nickel use in stainless steel because of volatile prices
2010-11-22 - (ps) - What is nickel?
2010-11-19 - (nas) - Moscow doubles nickel tax, how will NILSY, world's largest nickel producer react?
2010-11-16 - (reu) - Eramet's nickel expansion underlines supply concerns
2010-11-15 - (bw) - Nickel headed to oversupply by 2013, Brook Hunt says
2010-11-08 - (reu) - Philippine Nickel Asia IPO priced to raise $107 mln
2010-11-01 - (pi) - European Nickel close to securing forestry permit for Caldag project in Turkey
2010-10-28 - (mw) - Castillian completes sale of Kagera Nickel Project in Tanzania to Kagera Nickel Ltd.
2010-10-27 - (wmw) - Toyota starts nickel recycling business in Japan with three other companies
2010-10-26 - (sg) - Benton Resources updates on Kingurutik nickel project
2010-10-26 - (mb) - Nickel Asia to invest $102.4M in facility to turn out high-grade product
2010-10-22 - (bl) - Rusal rebuffs Potanin's $9 billion offer for 25% stake in Norilsk Nickel
2010-10-19 - (mw) - Allegheny Technologies raising prices on nickel-based alloys and specialty alloys
2010-01-29 - (reu) - Norilsk raises 2010 nickel output forecast

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