While there will be periods where the base metal grapples with price fluctuations within a new “super cycle”, resources advisor Martin Pyle said the bottom line was that the nickel price had grown 5-6 per cent (on average) for the past decade and none of the analysis suggests it will be any different going forward.
“In fact, forecasts of 500,000 tonnes a year in new nickel demand by 2020 now look conservative.
“I am expecting that the long-term price, although influenced by the short-term spot price, will be in the top end of the range of between US$6.00-7.50 per pound - and that does not fully account for the emergence of a new super-cycle driven by demand growth from China.”
He said the firmer price will also be underpinned by increasing evidence of nickel in emerging alternative energy forms such as nuclear, solar and wind. “All of these have strong elements of nickel within their project componentry,” said Pyle.
“Nickel also has the added appeal of high recyclability and in every sense, is the ‘metal of the future’.”
Pyle said the major threat to nickel’s long-term price trend upwards would be from nickel substitutes from lower quality stainless steel use - although some of that risk was being mitigated as nickel prices fell from their lofty 2007 levels, encouraging a return to higher nickel stainless post the global financial crisis.