Commodity Trading In Nickel, Base Metals Growth Continues
With strong infrastructure growth set to continue in emerging economies, commodity trading in nickel could be very profitable going forward.
After the Beijing Olympics, China looks set to continue its strong growth trajectory and this includes a voracious appetite for commodities across all classes, and especially the base metals.
Nickel is an important industrial metal and almost two thirds is used in stainless steel manufacture, while another 20% or so is consumed in other steel and non-ferrous alloys.
Get your FREE INO Trading Alerts when you subscribe to our free Commodity Universe Newsletter here. Just complete the simple form below. It's as easy as 1-2-3!
So with this stellar growth ahead for the BRIC (Brazil, Russia, India, China) states, get into commodity trading in nickel using the various online trading platforms available from commodity brokers. You can trade nickel futures contracts on the LME or if you prefer the more passive approach you could track an industrial metals commodity index by using one of the growing number of ETF’s which focus on base metals.
While refined nickel has many applications in construction, chemical engineering, household items and electronics, for example with nickel-cadmium batteries, we need to get a feel of the supply and demand dynamics globally. World Nickel Mining Production
Over the decade to 2006, world nickel mine production increased by 30% to 1.42 million tonnes (mt), with Europe contributing 24%, Asia 20% and America 31%.
In 2006, the major mine producers were Russia (0.29 mt) and Canada (0.23 mt), and these countries saw a 12% and 23% increase respectively in mining production over the 10 year period, according to World Bureau of Metal Statistics (WBMS).
The increase in the BRIC economies was 21% over the decade, with Russian being the main contributor, and China seeing its output rise by 47% to 69,000 tonnes.
World Nickel Refined Production
The nickel ores have to be smelted and then refined to bring the metal up to a standard acceptable for trading and industrial use.P> After flash smelting and other chemical processes designed to remove the sulphur and iron content, the base metal is concentrated and ready for refining and then distribution.
Two classes of nickel are used, where class 1 refers to electrolytic nickel, steel making powder, nickel pellets and chemical grade nickel oxide. Class 2 includes ferro-nickel and nickel oxide sinter.
Refined production increased by 32% to 1.33 mt in the 10 years from 1997 to 2006, according to WBMS.
Russia was again the dominant producer among the BRIC with 0.27 mt in 2006 (21% of world total). Canada (0.154 mt; 12%), Japan (0.152 mt; 11%) and China (0.11 mt; 8%) were the other main refined producers.
We have seen significant increases in the consumption of other industrial metals such as copper, aluminium, lead,zinc and tin over the 10 years to 2006, and the same trend appears to have developed with nickel.
For the ten years to 2006, world refined nickel consumption increased by 39% to 1.38 mt , with the BRIC nations posting a 179% increase, which interestingly saw Russian demand fall by 26% over this period, while India was unchanged.
Again the big contributor to world and BRIC increases was China with a whopping 508% surge in demand to 0.23 mt from 37,000 tonnes 10 years previously.
Japan posted a modest 6% increase to 0.19 mt while USA demand fell 12% to 0.136 mt.
So the strong demand story from BRIC economies, and particularly China, looks set to continue. But just to add to the uncertainty, a look at the movement in world stocks of refined nickel shows a decline of 44% to less than 87,000 tonnes in 2006.
This change includes a dramatic drop of 90% in metal exchange stocks of nickel, principally the LME, for the ten year period to 2006.
The consensus is that China will continue to suck in record amounts of the base metals for the foreseeable future, and so commodity trading in nickel could be very profitable over the longer term.
Lead Tin Aluminium Copper Zinc
Return to Base Metals from Commodity Trading In Nickel
|
