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Nickel Reachs "Pig Nickel" Pricing

July 29, 2008 – Comments (3)

I have noticed that nickel has gotten into the 8/lb range.  I am sure I did a post last year where I linked to Frank Veneroso and his paper that discussed "Pig Nickel."  (Maybe I have the name wrong, I am to lazy to look it up). 

Anyway, what he discussed was that China was now producing nickel through a process that had previously been too expensive because nickel had to be about $8/lb for it to make sense to do so.  So, China started importing this low grade ore and producing nickel by this other method.

Well, nickel is now on the cusp of the price where this other method become unprofitable.  It is actually energy intensive so it is hard to say if it is costing more.  Nickel was over $20/lb so the ore was more expensive.  I wouldn't even want to guess if the reduced price for the nickel ore offsets the increased energy costs.

Anyway, nickel is now at a price where the most rapidly growing sector of nickel supply dies.  Hard to say if the decline here would be enough to offset other new production.