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 Replies: 9 / Views: 1,602 |
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Pillar of the Community
Canada
3692 Posts |
http://www.kitcometals.com/charts/n....html#30daysSorry for posting this in the bullion section. I know nickel is only a base metal, however, I wanted to point out that although the other precious metals are falling, nickel in particular is taking a huge huge beating. Any input on this? Is somebody buying up half the world's supply in one day? Or what's going on?
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Bedrock of the Community
Australia
21786 Posts |
I can't think of a reason for a suden price drop, but most of us in the CCF know that governments around the World are getting away from issuing coppernickel coinage. Nickel plated steel coins will become far more common. Perhaps the announcement by the British Royal Mint to convert the 5 and 10 P from copper nickel to nickel plated steel did not help the nickel price. That could be the trigger for other Mints around the World to do the same. Has there been any major announcement about the production of stainless steel by China or the U.S.? |
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Pillar of the Community
Canada
862 Posts |
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Pillar of the Community
 Canada
3692 Posts |
But, Sel, wouldn't that drive prices upwards? (Gresham's Law)
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Bedrock of the Community
Australia
21786 Posts |
Libertad: You are right. "The bad money drives the good money out".
The problem, is when it comes to new coin production. If there is a change to taking nickel out of circulating coins though, the result is less demand for new nickel. The other problem associated with this is that the mints will recover most of the nickel from circulating coinage, and thus will also result in lessening demand for nickel. This is a trend, and this policy does not fully explain the sudden drop in the nickel price.
Supply and demand is ultimately what drives the price of a commodity.
Having said that, by far the most demand for nickel is in the production of stainless steel. I feel that the reason for the current drop in the price of nickel has to be found what news relates to stainless steel production. You have to have a feel for steel.
It's just that so far, I have failed to find with a 'Net search, a good reason for the sudden drop in the nickel price. The reason is out there somewhere, I just haven't found it yet.
It may be all related to the declining euro economy.
Perhaps there are others in the CCF who are better detectives than me.
Edited by sel_69l
12/28/2011 9:20 pm
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Bedrock of the Community
Australia
21786 Posts |
I have found out a little about stainless steel production.
The Chinese have had an increasing demand for nickel pig iron (NPI), which is increasingly used in the production of stainless steel.
If you can, hang in there with me with geology for a bit; the start af an understanding could emerge.
Australia has vast tracts if high concentrations of nickel in their laterites in Western Australia. I know. The stuff is everywhere in W.A. The concentration of nickel in these laterites is much higher than for other laterites in other parts of the world, at around 1% to 2%. When these ores are processed, this rises to around 4%. Much cheaper to make stainless steel this way.
Apparently, it is these concentrates that the Chinese are buying from Australia. This has had the effect of lessening the demand for nickel from other ore sources in the production of stainless steel.
For other explanations of the nickel price, have a look at five year nickel price histories. I have. The suggestion is that the recent price of nickel is low, and a long term rise trend in the future may be indicated. This still does not explain the sudden price drop.
Both of these explanations seem contradictory to me. I don't have a nickel position, so I am relieved from making my own judgement to increase or decrease my nickel position.
I only have about 100 or so scrap pure nickel coins, I regard that as negligible. Somewhat of numismatic interest only.
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Pillar of the Community
Canada
3692 Posts |
So, you're saying that the Chinese have recently bought up mining contracts in W.A. and have just now begun processing it? Ore.....?
Around 2007 the price was nearing $25/lb...crazy. I can't really see it going higher than that, but imagine was people in 1988-1989 were thinking, as well.
The whole thing just struck me as pretty weird because I see other metals falling in price but nickel is just taking a nose-dive - almost half in one single day! It was already on a downward trend but wow!
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Bedrock of the Community
Australia
21786 Posts |
Near future trend? Probably will continue. Long term trend? Dunno.
Near future dead cat bounce? Most probable. Can't drop that far that fast without at least a partial comeback.
BTW, how much is a Canadian pure nickel and a cu ni U.S. nickel worth at current prices of nickel and copper?
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Valued Member
Canada
241 Posts |
Hi there. Usually one of the sites I frequent for current metal prices is the one mentioned in the initial post of this thread. I too was shocked to see nickel plummet on the charts.
A similar charting event occurred during the summer months (winter months for some!)and that was the result of a software/input error! After checking a couple of international sites within the past hour or so, I was relieved to see nickel was still hovering around the $8 U.S. range.
Hopefully the error is corrected by opening time in N.Y. Thursday morning. Yikes, I better be right...
Edited by staircase
12/28/2011 10:47 pm
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Pillar of the Community
Canada
3692 Posts |
Staircase: your explanation is making much more sense now. Thanks. We learn something everyday!
Them computer folk are going to be in for a laugh tomorrow morning!
Discussion over, I hope.
Edited by Libertad
12/29/2011 12:57 am
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Replies: 9 / Views: 1,602 |
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Posted 12/28/2011 8:08 pm
