Because the increase in the price of nickel is a serious problem
The flare-up in the price of nickel has caused trading on the London Metal Exchange to be suspended but the problem is much more in the long term. All the details on its uses, ESG risks and for the energy transition
The first trace of nickel in a man-made tool dates back to 3,500 BC and is found practically everywhere today, but since the invasion of Russia in Ukraine its price has skyrocketed, pushing the London Metal Exchange (LME) to suspend its negotiations.
WHAT HAPPENED AT THE LME
After the unprecedented jump in prices on the three-month contract which exceeded $ 100,000 per ton with an increase of 250% in two sessions, the LME yesterday morning suspended trading on nickel.
The war in Ukraine, which led Western countries to sanction Moscow, makes investors fear further measures that could prevent Russia from exporting its nickel production.
“According to the reconstructions of international agencies – writes Radiocor – the rapid rise in prices has put investors who had taken short positions on the metal in crisis, triggering the race for coatings. Subsequently, LME decided to cancel all contracts concluded after midnight (London time) and to defer the delivery of contracts with physical delivery scheduled for March 9 and subsequent dates ".
WHERE THE NICKEL COMES FROM
Russia is the third largest producer of nickel in the world , the first is Indonesia and the Philippines second.
The chemical element is found mainly in the soil and, according to what Agi reported, “at the moment it is estimated that around 130 million tons of it are available on the whole planet Earth; annual production exceeds 500,000 tons and it is estimated that easily exploitable reserves will last for at least another 150 years ".
FURTHER COMPLICATIONS
Not just war. Indonesia, among other things, wrote Milano Finanza a couple of days before the Russian invasion of Ukraine, feared the possible decision "to ban exports of the metal to encourage its use in domestic production".
THE ADVANTAGES OF NICKEL
Its very wide use is due to its characteristics: hard and resistant but at the same time malleable and ductile. It is a fairly good conductor of heat and electricity.
ALL USES OF NICKEL
Nickel, also known as the "devil's copper", is a metal that is found in many objects that we use every day. From coins to mobile phones, but also in lighters and watches. Not to mention the use made of it in the ever-growing market for electric cars and in the manufacture of agricultural products, including insecticides and pesticides, as well as in the processing stages of vegetable oils. It is also used for the formation of precious metals, silver and red gold.
THE MAIN DESTINATION OF NICKEL
The main destination of nickel, writes Agi , is stainless steel, also called stainless steel and is therefore used in the preparation of alloys: "about 65% of nickel consumed in the Western world is used to make stainless steel, whose composition can vary but it is iron with 18% chromium and 8% nickel ".
“12% of all nickel consumed ends up in super alloys. The remaining 23% – explains the news agency – is divided between alloy steels, rechargeable batteries, catalysts and other chemicals, coining, foundry and plating products ”.
BECAUSE NICKEL IS FUNDAMENTAL FOR ENERGY TRANSITION
As an article in the newspaper Domani pointed out, "the nickel economy is divided between the old and the new economy". In fact, of all the industrial use we have made of it since the 1900s, today "only 5% ends up in electric batteries" designed for electric vehicles, but "the problem is that to keep up with the transition, the share must rise to 59 % ".
According to the article, current nickel mines are insufficient to make the transition and it will have to "dig and refine wherever possible, up to thousands of meters deep in the Pacific Ocean." However, for now this approach does not appear to be viable either economically or environmentally.
Among other things, it is also pointed out that, although not the solution to all evils, increasing the production of nickel is essential to reduce that of cobalt, coming from a "supply chain made up of slavery, neo-colonialism and child labor".
WHAT ESG ISSUES AFFECT NICKEL?
But nickel is not immune from the environmental issue, in fact, Reuters recalls, it also has ESG risks. Indeed, Indonesian nickel has a high carbon footprint and there are concerns that the government will eventually give in to producers who want to release the waste into the sea.
This is a machine translation from Italian language of a post published on Start Magazine at the URL https://www.startmag.it/economia/perche-laumento-del-prezzo-del-nichel-e-un-problema-serio/ on Wed, 09 Mar 2022 12:31:39 +0000.