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Nickel was one of the hottest commodities on the planet as recently as 2022. Analysts and mining executives then predicted blue-sky fundamentals for the critical mineral, based on the belief that demand for the electric car battery input would far outstrip global supply.
But after a short-lived trading frenzy drove nickel to a record high in March, 2022, the commodity went into a steep decline. In the last year alone, nickel has tumbled almost 30 per cent to around US$17,500 a tonne.
The crash in the nickel price is putting tremendous pressure on the industry. Major mining companies such as First Quantum Minerals Ltd., Glencore PLC, and Wyloo Metals Pty Ltd. are closing mines, idling production and issuing bleak forecasts.
Anglo American PLC recently wrote down the value of its nickel operations by US$800-million. BHP Group Ltd., the world’s biggest mining company by market value, recently estimated that about half of all nickel production globally is money-losing, as it incurred a US$2.5-billion impairment charge.
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