The Nickel Market
The nickel market has consistently been the most volatile of all the resource commodities. The historical long term view of the nickel price has approximated US$3/lb. However this forecast prevailed prior to the insatiable demand from China and the introduction of a high-cost, complex metallurgical lateritic nickel supply and even higher-cost ferro-nickel supply.
There has been a fundamental upward shift in the long-term price forecast of nickel, which has been driven by tight supply but also the step change in the cost of production. Macquarie, Citigroup and UBS have all adjusted their long-term view of the nickel price range from US$5.50/lb to US$7/lb.
The cobalt price is particularly volatile given the relatively small-size and opaque trading behaviour of the market. The historical long-term cobalt price approximates US$9/lb however the current price of cobalt is approximately US$28/lb.
LME Nickel Price (source: kitco.com)
