Communications consultant and CMJ contributor Stan Sudol (stan.sudol@Sympatico.ca) sent us his observations on the nickel price and how far short of a record the current value is.
“Contrary to what you may have been reading in the global media (as of May 28, 2006) nickel has not reached its historical high. That occurred in late March, 1988 when the price skyrocketed to a record-setting US$10.84/lb, a level yet to be reached during this current commodity boom. With inflation factored in, that peak would be worth US$16.78/lb.
“The record spike in price was the result of a ‘perfect storm’ of politics, strikes, technical problems and industry under capacity. The straw that finally broke the camel’s back was a dispute between Falconbridge and the Dominican Republic over an export tax on ferronickel shipments. The peak price of US$10.84 didn’t last long but it did establish a benchmark that has yet to be broken.
“Current global worries about Sudbury’s labour negotiations [a tentative deal was reached on May 29], spring floods that are holding up Russian nickel exports and a recent transformer fire at PT Inco’s Sorowako, Indonesia, operations in one of its four electric furnaces will put additional upward pressures on the current price.”