The 2015 Metals Outlook Series: Nickel – by Cole Latimer (Australian Mining – December 1, 2014)

The story of nickel is finally one of stability.

Since 2005 the me­tal has been wracked by skyrocketing highs and sharp declines that have caused massive job losses and uncertainty that has seen an exodus from the sector by many of the larger players.

Much of this was due to a fall in stainless steel demand, working inversely to the growing demand for construction steel. IBISWorld put it succinctly: “Nickel prices, having reached unprecedented highs prior to the global financial crisis, plummeted as global economic growth slumped in subsequent years.”

And while the future is slated to be better, a swift and strong recovery is not forecast. Earlier this year the metal reached a two year high in May, but since that time has reversed its gains, falling 27 per cent.

Much of this spike was based on Indonesia’s implementation of a ban on unrefined nickel being exported, with prices surging 56 per cent at the time, however the fall came quickly due to the likelihood of current global supply more than meeting the hole left by the Indonesian ban.

BHP’s attempts to sell off its Nickel West assets exemplified the confused nature of the sector. While the miner saw the assets as valuable enough to retain during its greater demerger earlier this year, it did not see them as vital enough to keep within its mix.

Instead the miner attempted to sell off the various mines and smelter assets in Western Australia, and while there were plenty of alleged approaches for the suite from other majors such as Glencore and X2 Resources, BHP could not find a buyer and has now been left with the assets.

However the future is now looking more stable for nickel. As opposed to the volatile movements seen earlier this century, there will finally be some stability ahead.

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