Roberto at WAFD: Nickel Prices Skyrocket During 2006

John Wolz

Nickel and chrome prices are up and stockpiles of nickel have plunged 87% this year, Tim Roberto of Star Stainless reported to the Western Association of Fastener Distributors.\
Nickel was selling at $2.70 per pound in 2002 and by 2005 the average price was up to $6.69. By mid-October the price had leaped to $15.25.
Other stainless steel materials are rising too. Chrome jumped from 30.63 cents per pound in 2002 to 73.68 cents by last year.
Volatile nickel prices are not new, Roberto pointed out. In 1986 nickel was $1.60 and it reached $10.88 in 1988. Adjusting for inflation the 1988 price would be equivalent to about $16 today, he noted.
Factors making nickel prices volatile in recent years include a long winter or heavy spring thaws in Russia and a labor shutdown in Canada. This year a labor strike in New Caledonia is driving the increase.
Canadian production is expected to rise 18% by 2008.
Raw material price predictions are difficult, Roberto acknowledged. Nickel “is poised to go down in 2007, ” he ventured. But the 2005 predictions were that nickel prices would go down this year, he hedged.
There also is price pressure on copper as China seeks to electrify the entire country. Conversely, potentially adding to supply is one mine in Peru preparing to increase production from 100,000 metric/tons to 300,000 m/t.
The long-term concern is that at current usage rates the worldwide current copper reserves will be depleted in 67 years.
“Nothing affects stainless steel prices more than base materials going up,” Roberto reflected on his 40 years with Star Stainless.
This year a factor is that China is heavily buying scrap, Roberto added.
Fastener distributors can monitor raw material prices on such websites as metalprices.com. In addition to prices, metalprices.com shows world inventory and consumption rates in days or hours. Recently the website projected a 29 hour supply at current consumption rates.
The Nickel in Your Pocket &
With the rise in the price of nickel and copper metals, as of October 17 the U.S. 5-cent “nickel” coin reached 6.3 cents worth of the two metals, Roberto pointed out.
The 5-gram coin is 75% copper and 25% nickel was worth 6.3% earlier this month when nickel was $13.95/lb. At that point the federal government was losing about 1.3 cents per coin minted. The U.S. Mint had produced 1.2 billion nickels through September this year at a net loss of more than $17 million.
The coin has 1.25 grams of nickel and 3.75 grams of copper
Don”t plan to melt nickel coins for a profit, Roberto warned. It is illegal to “deface, mutilate, impair, diminish, falsify scales or lighten” U.S. coins. �2006 FastenerNews.com