An in-demand industrial commodity since the start of the steel-making revolution in the 19th century, Nickel provides a solid investment option due to its consistent high demand and robust supply.
Investing on this base metal is also a bet on the prospects of manufacturing and industrial sectors, both of which remains important industries today.
Investing on base metals such as nickel, aluminum, uranium, iron and zinc is dissimilar from investing in precious metals such as gold and silver. Because the price of base metals often moves in the same direction as the world economy, the value of precious metals in turn move in the opposite direction.
Already a popular commodity, the demand for nickel is expected to grow further thanks to recent proclamations of industry leaders like Elon Musk, the CEO of Tesla, who lately remarked about the great need for nickel in the manufacturing of electric cars.
Thinking of trading nickel with eToro?
78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
History of Nickel
The earliest use of nickel can be traced back to 3500 BC when bronze materials dug in archaeological sites in Syria showed to contain at least 2% of nickel. Coins of nickel-copper alloy were minted during the 2nd century in the territories belonging to the Greek Empire.
Starting in 1848, the first large-scale smelting of this industrial commodity started in Norway. Nickel was then introduced for steel production in the late 1880s, therefore increasing its demand. It was also during the late 19th century that nickel was used to make coins.
Today, world production of nickel is estimated to be around 2.5 million tonnes per year with the countries of Philippines, Russia, Indonesia, Australia, New Caledonia and Canada being the biggest producers.
At least 300,000 items used in industrial, consumer, military, aerospace, transport, architectural and marine sectors use nickel. As a result, it remains a consistent valuable commodity in the world.
Leading Drivers of the Price of Nickel
- Chinese Demand: Since becoming a global economic super power, China now accounts for more than half of the yearly demand for nickel. This is in comparison to accounting for only 20% of the global demand for this commodity a decade ago.
- Global Stocks: By following the London Metals Exchange (LME), investors can keep track of the worldwide stock levels of industrial metals and other commodities. This exchange reveals clues about supply surpluses and shortages.
If world inventory drops, the market may face a shortage of nickel supply that could lead to increased prices for the base metal. Similarly, if overstocking occurs and the inventory levels widens, the market may face an over surplus of the metal which may cause prices to decrease.
- Input Prices: The production of nickel also uses ample supplies of crude oil, coal and electricity thus the cost of attaining these other minerals can also factor into its present value.
- Global Demand: Since base metals are integral components of steel and steel is a major material used in countless infrastructures around the world, over-all economic and industrial infrastructure projects highly influence global demand for nickel.
- Government Policies: New rules and regulations from biggest exporting countries of base metals can also cause a major impact on its current price. For example, the Philippines' recent threat to end all mining activities in the country momentarily affected the price of base metals.
Ways to Invest
There are five leading ways to invest in base and precious metals or commodity. These are: CFD trading, ETPs (exchange-traded products), physical metal, stocks and futures.
- ETFs: Invesco DB Base Metals Fund (ARCA: DBB) and the iPath Series B Bloomberg Industrial Metals Sub-Index Total Return ETN (ARCA: JJM) are investment products that provides exposure to investors of base metals like nickel, copper, aluminum and zinc.
- Futures: Base metals futures can be traded on the London Metal Exchange (LME). An LME nickel futures contracts is composed of 6 MT and are priced in US $.
- Physical Metal: This is defined as owning a physical item of a base and precious metals itself in the form of bullion, bars or coins.
- Stocks: This manner involves buying shares of companies involved in the production, extraction and discovery of nickel. Popular companies include: Hudbay Minerals (NYSE: HBM), Lundin Mining (TSK: LUN) and First Quantum Minerals (TSK:FM) just to name a few.
- CFD Trading: Contracts-for-difference (CFD) is fast becoming a widespread practice of investing on the market. With the advancement of social trading platforms such as eToro, traders can easily speculate on the price of stocks and commodities alike. The value of the CFD is the difference between the price of the asset at the time of the purchase and its present value.
How to Start CFD Trading of Nickel?
Find a reputable, reliable and regulated CFD trading platform. The eToro trading app is a good place to start CFD trading. By using the app's advanced risk management and investment tools, you can instantly enjoy seamless execution of trades. Trading this commodity in eToro's CFD trading platform doesn't require any storage fees since you won't be trading any physical assets.
How to Trade Nickel on eToro?
- Create an account on eToro / Log-in your account for existing users.
- Click "Discover".
- Select "Commodities".
- Choose “NICKEL”.
- Select BUY or SELL.
- Key in your desired amount to invest or the number of nickel units you want to trade.
- Review and set the stop loss, leverage, and take profit parameters.
- Select “Open Trade”.
Nickel Price History
Historically, Nickel reached an all-time high of $54,050 in May 2007.
Thinking of trading nickel with eToro?
eToro is a multi-asset platform which offers both investing in stocks and cryptoassets, as well as trading CFDs.
Please note that CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 78% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.
Past performance is not an indication of future results. Trading history presented is less than 5 complete years and may not suffice as basis for investment decision.
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