LONDON (Reuters) – The world used almost 2.2 million tonnes of nickel last year. Around two thirds of that metal was absorbed by the stainless steel industry, which uses it as a key alloying agent.
Stainless steel production has been booming. Global output rose by 5.8 percent last year and accelerated by another 9.5 percent in the first quarter of 2018, according to the International Stainless Steel Forum.
This has been good news for nickel. The International Nickel Study Group (INSG) estimates that global first-use nickel usage jumped by 7.8 percent last year and by another 9.7 percent in the first five months of this year.
Such are the fundamental bonds between nickel and stainless steel, nickel dancing to the tune of its biggest user base. Or at least that’s how it used to be. The nickel market may be changing.
NICKEL’S NEW PRICING PARTNER
Historical price correlations between nickel and stainless steel have broken down, according to Russia’s Norilsk Nickel, the world’s largest producer. Nickel has been caught up in the broader metallic sell-off but it is the only London Metal Exchange base metal still to be in positive year-to-date territory, up four percent at a current $13,120 per tonne.
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