Annual Average Nickel Price
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Significant events affecting nickel prices since 1958
1966 Western Mining Corp. discovered nickel sulfide mineralization at Kambalda, Western Australia, triggering extensive
exploration of the greenstone belts between Norseman and Wiluna
1969 Canadian labor strike led to a severe spot shortage of nickel and a sixfold increase in the price of cathode
1972 Falconbridge Dominicana C. por A. commissioned its ferronickel smelter at Bonao, Dominican Republic
1977 P.T. International Nickel Indonesia (P.T. Inco) commissioned its Soroako mining and smelting complex on the
Indonesian island of Sulawesi; laterite mining began in Guatemala
1978-79 Labor strike in the Sudbury District of Ontario reduced Canadian mine output by more than 40%
1979 Nickel became the seventh metal traded on the London Metal Exchange (LME)
1981-82 A worldwide recession caused nickel demand and prices to fall sharply
1987-88 The Government of the Dominican Republic levied a substantial export duty on ferronickel; Falconbridge
Dominicana countered by limiting ferronickel shipments and declaring force majeure
1987-89 Supply shortages; Stainless steel production in the Western World passed the 10-million-metric-ton-per-year mark
1991 Dissolution of the Soviet Union followed by a sharp rise in exports of Russian nickel
1993 Voisey’s Bay nickel-copper deposit discovered in northeastern Labrador by diamond prospectors
1999 The Murrin Murrin laterite mine and two other pressure acid-leaching operations came onstream in Western
Australia
During the 17
th
century, German miners had difficulty
processing certain copper sulfide ores because of an
associated mineral that they called kupfernickel, or “Old
Nick’s copper.” The troublesome mineral turned out to be
nickel arsenide and is known today as “niccolite” or
“nickeline.” In 1751, Axel Fredrik Cronstedt isolated a
previously unknown chemical element from niccolite. This
element was subsequently named “nickel.” Nickel was mined
on only a limited scale until the large lateritic nickel deposits
in New Caledonia came into production about 1875 (Boldt
and Queneau, 1967, p. 61-65). The first nickel operations
processed sulfide ores—primarily in Canada, Central Europe,
China, Pennsylvania, and Scandinavia. Nickel had little
economic or industrial significance until 1820 when Michael
Faraday succeeded in making synthetic meteoric iron by
adding nickel to pure iron. Faraday’s alloy was the fore-
runner of nickel steel, a family of ferrous alloys that continues
to play an important role in industrial development. One of
the first uses of nickel steel was for ordnance. Nickel-steel
armor plate was first produced commercially in France in
1885 (Hall, 1954). Competitiveness trials of nickel-steel
armor took place in the United States in 1890-91, and within
a few years, Bethlehem Iron Co. (forerunner of Bethlehem
Steel Corp.) was producing large nickel-steel guns for the
U.S. military (Wharton, 1897). The nickel steels developed
before World War I contained only 1.5% to 4.5% nickel, with
a carbon content of 0.2% to 0.5% (Hess, 1917). Other
important early uses were bridge structures, railroad rails,
axles, ship propeller shafts, and automobile engine parts
(Cammen, 1928). The first commercial chromium-nickel
steel—and one of the first grades of stainless steel—was
made at St. Chamond, France, in 1891. Like nickel-steel
armor, chromium-nickel-steel armor proved to be much
superior to the carbon-steel plate then in use, triggering
extensive production of the new type of steel (Hall, 1954, p.
1-62).
In the late 1990’s, stainless steel production accounts for
more than 60% of world nickel consumption and is the
primary factor in nickel pricing. Stainless steel is defined as
an iron alloy that contains at least 11% chromium. Nickel-
bearing stainless steels are termed “austenitic”, a reference to
their characteristic solid solution microstructure, and typically
contain between 6% and 22% nickel—with 18% chromium
and 8% nickel being the most common composition. In the
Western World, total stainless steel production has grown at
about 6.1% per year since 1950 (Inco Limited, 1998, p. 3-8).
Since 1985, the austenitic share of Western stainless steel
production has accounted for about 75% of total stainless
output, the rest being ferritic or martensitic. In recent years,
the austenitic percentage for the United States has ranged
from 63% to 67% because its steel plants produce significant
amounts of ferritic stainless for the North American auto-
mobile industry. Since 1970, demand for stainless steel in the
United States has grown at a much faster rate than that of
carbon steel but still constitutes only 2% of total U.S. raw
steel production. For the next 20 years, stainless steel
production is expected to continue to play a prominent role in
determining nickel price levels.
Like petroleum, nickel is a critical commodity in wartime.
Nickel, as well as cobalt, is needed to make superalloys for
engines that propel jet aircraft and guided missiles. Pure
nickel is used in high-performance batteries, such as those
that start jet engines or power satellites. Austenitic stainless
steel and nickel-base superalloys are commonly used if
chemical corrosion is a serious problem, such as on
submarines and surface naval vessels or at food-processing or
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