Nickel riding high on electric vehicles and supply shortages 鎳供不應求 電動車題材錦上添花

Tue, Mar 13, 2018 - Page 14

With a weaker US dollar already pushing up the price of metals in addition to growing global demand for electric vehicle components — which use nickel as a raw material in their electric batteries — the price of nickel on the London Metal Exchange (LME) has appreciated by 50 percent from its low at the end of 2015. Despite this, nickel’s current value is still a long way off from its historic high of US$30,000 per tonne.

Analysts say nickel is a classic case of a lagging index. With weak demand for nickel over the past few years, mining companies reduced investment in the metal, but an inability to meet a sudden increase in demand has sent the price soaring. However, other analysts believe widespread adoption of electric vehicles is still a long way off and attribute the near-term rise in the value of nickel to market funds driving up the price.

Last Tuesday the price of nickel rose by 1.8 percent on the LME to approach a three-year-high of US$13,500 per tonne, mainly off the back of favorable economic data from China. Meanwhile, demand for steel is high, which pushed up demand for raw nickel, Chinese new home prices rose in January and China’s manufacturing survey revealed an expansion in orders for last month.

According to global commodities broker Marex Spectron, international nickel prices have been on the rise for the past 12 months and nickel is currently moving toward a bull market scenario. The broker argues that, when analyzing the recent strength of nickel, increased demand for electric vehicle components was simply the cherry on the cake and a fatigued US dollar was the main reason behind the metal’s rise. Additional factors are the global economic recovery and the automation of industry. Furthermore, in January the US dollar index touched the bottom of a price band, falling to 88.43 points, which Marex Spectron says strengthened the price of many commodities.

Additionally, the mining industry has pointed out that from a demand perspective, consumption of nickel has increased over the course of the past year. However, due to an extended period of downturn in the market, investment in nickel extraction by mining companies stagnated. Since it is difficult for mining companies to rapidly ramp-up production over the short-term, supply could not keep up with demand and this drove the upswing in the price of nickel.

(Liberty times, translated by Edward Jones)




全球商品經紀公司Marex Spectron表示,國際鎳價已漲了一年,目前看來還在向牛市前進。分析鎳價強勢的原因,電動車題材只能算是錦上添花,最主要還是美元疲軟;另外全球經濟復甦及工業自動化也是助力。美元指數一月底創下八十八點四三的波段低點,讓許多大宗商品都走強。





What is economic data and

how is it used?

In every major economy, a range

of economic data is released, usually on a monthly basis, which can be used to gauge the overall health of the economy. Central banks use the data to inform decision making around the setting of interest rates and investors use the data to make investment decisions.

Key economic data includes:

Consumer Price Index (CPI)

Gross Domestic Product (GDP)

Retail sales

Employment/unemployment data

Manufacturing surveys

New home price data is used to gauge the overall health of an economy: Higher new build prices are seen as positive for an economy (and the associated currency). A growing economy will increase demand for raw materials including steel and nickel.

Manufacturing surveys of individual private sector companies, which provide information on production levels, new orders and inventories, are usually combined into a Purchasing Managers’ Index (PMI) for an individual country. The PMI is used as a leading indicator of economic health since purchasing managers react quickly to market conditions. A booming manufacturing sector will also increase demand for raw materials, including various types of metals.

(Edward Jones, Taipei Times)