Nickel price soars amid export ban and sanctions fear

The price of nickel, a key alloying element in low alloy steels, stainless steels, high alloy steels and non-ferrous alloys, broke the US$17,000/t barrier in early April, a rise of 16% since the start of 2014. The strong performance of the nickel price is forecast to continue as a result of reduced supply of nickel ore following an Indonesian ban on exports. Until this ban, Indonesia was the world’s top high-grade nickel ore supplier.

According to a report from Standard Bank quoted in the Financial Times on April 10th, if the export ban remains in place beyond July’s presidential election in Indonesia, the global nickel market will see significant deficits of 134,000 tonnes in 2015, 106,000 tonnes in 2016 and 77,000 tonnes in 2017. “In the absence of a change in Indonesian policy, we think that by 2016, the market will get tighter than in 2006-7, when prices traded in the $30,000-$50,000 a tonne range,” the bank stated.

Potential sanctions by the EU and the US against Russia could impact on the supplies of nickel from Russia’s Norilsk Nickel, a producer that accounts for 17% of the global nickel production. According to CEO of Norilsk Nickel, Vladimir Potanin, the company is considering measures to shield against possible sanctions from the US and EU by looking to Asia. “We have large volume of operations in the Chinese market, but the main payment currencies are dollar and euro. In principle, nobody hinders settlements in such currencies as the yuan for deliveries to China. We decided to explore this issue, to look how it’ll function,” Potanin told Russia Today.

Potanin stated, however, that he does not believe there will be tough sanctions as “they are unnecessary, uninteresting and harmful to both parties. But in a case of specific emotional actions of regulators or of certain countries – just in case – it is necessary to study what we will do in this situation.”

Following previous nickel supply crises and price hikes, materials suppliers to the PM industry developed a number of low nickel containing steel powder materials that used alternative alloying elements such as manganese. Traditional PM steel compositions can utilise relatively high levels of molybdenum, nickel and copper to achieve medium to high mechanical properties in the as-sintered condition, however these alloys are sensitive to price instability.

Whilst low nickel containing powders and also copper-containing materials cannot be used as a direct substitute for alloys with higher nickel contents that are currently being used because of dimensional change and mechanical property requirements, their availability offers the PM industry a strategic opportunity to, for selected PM steel materials, move away from a dependency on nickel. The latest nickel supply and price issues could, therefore, again accelerate the trend towards leaner, more cost effective alloys, some being completely free of nickel.