Cash prices for nickel have risen sharply this year on the London Metal Exchange, triggering some concerns of a possible shortage this year. Prices have skyrocketed from a low of around $18,000 per metric ton earlier this year to a recent closing of $26,400.
It was exactly three years ago that high nickel prices were forcing design engineers to examine substitutes for stainless steel, a major consumer of nickel. In 2007, cash nickel prices peaked around $54,000 per metric ton and then plunged.
Akira Nozaki, general manager at the nickel sales and raw material division of Sumitomo Metal Mining Co, said in an interview with Bloomberg reporters that world demand will probably exceed supply by 36,000 metric tons this year.
Sumitomo Metal Mining, however, has a vested interest in predicting higher nickel prices. Other experts point to very high nickel stockpiles and emerging nickel-producing capacity in New Caledonia, the Philippines and Madagascar.
The wildcard is demand, particularly in China, which meanwhile, is also substantially increasing its own nickel production.