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Nickel: The Volatile Commodity Powering Modern Industry

Nickel is a crucial industrial metal and an important commodity in global markets. Here’s an overview of nickel as a commodity:

Symbol: Ni (on the periodic table)
Atomic Number: 28
Primary Types: Class I (High-purity, ≥99.8% Ni) and Class II (Lower-purity, e.g., ferronickel)
Major Producers: Indonesia, Philippines, Russia, Canada, Australia
Major Consumers: China, stainless steel producers, battery manufacturers

Stainless Steel Production (~70% of demand) – Adds corrosion resistance.
Electric Vehicle (EV) Batteries (Growing segment) – Used in lithium-ion batteries (nickel-cobalt-manganese or nickel-cobalt-aluminum chemistries).
Alloys & Superalloys – For aerospace, military, and high-temperature applications.
Plating & Coatings – Provides durability and corrosion resistance.
Other Uses – Chemicals, catalysts, and coinage.

Price Drivers:
- Supply: Indonesia dominates production (over 50% of global supply).
- Demand: EV boom and stainless steel growth.
- Geopolitics: Sanctions (e.g., Russian nickel) can disrupt supply.
- Stockpiles: LME (London Metal Exchange) inventories influence prices.
- Technological Shifts: Battery chemistry trends (e.g., high-nickel vs. lithium-iron-phosphate).
Price Volatility:
- Nickel prices surged in 2022 due to a short squeeze on the LME (reaching over $100,000/ton briefly before trades were canceled).
- Long-term prices depend on mining output, battery demand, and substitution risks.

Futures & Options (LME, COMEX) – Direct exposure but high risk.
ETFs & Stocks – E.g., iPath Bloomberg Nickel Subindex ETN (JJN) or mining stocks like Norilsk Nickel (Russia), Vale (Brazil), BHP (Australia).
Physical Nickel – Rare for retail investors due to storage costs.
Mining Companies & Royalties – Indirect exposure via equities.

Environmental Concerns: Nickel mining (especially laterite ores) is energy-intensive.
Substitution Risk: Battery makers may reduce nickel content if prices rise too much.
Geopolitical Risks: Export bans (e.g., Indonesia halted exports in 2020).

Indonesia’s Dominance: Expanding production but facing ESG scrutiny.
EV Demand Growth: Tesla, CATL, and others pushing for more nickel-rich batteries.
LME Reforms: After the 2022 short squeeze, regulators are tightening rules.