Three-month Nickel on the London Metal Exchange fell on Monday to a new 12-year low, falling as low as $8,175 per metric ton. The metal is the biggest loser on the LME this year, losing around 45% of its value on the year-to-date.
Three-month London Metal Exchange nickel has now hit a 12-year low. Source: FastMarkets.com.
This year, we heard many times that since more than 50% of producers were underwater, prices were due for a recovery. But once again, the market has proven that production costs don’t determine the price of a metal, it’s what people are willing to pay that determines it.
Why is Nickel Still Falling?
Nickel has fallen on a poor outlook for its struggling steel sector as well as a strong dollar and China’s slowing growth. These two have also driven the entire metals complex down this year.
Nickel is the first metal falling below its 2009 low. With this, we believe the chances of other metals suffering the same fate have increased. Some base metals like copper are still trading well above their recession’s lows. Aluminum however, could be next.
by Raul de Frutos