Price of Nickel Down 30% January - August 2008

The price of nickel continues to fall, down 30% so far in 2008. Falling prices together with rising costs are making many nickel operations unprofitable. Russia's Industrial Metallurgical Holding has shut down 30% to 40% of its production capacity because falling nickel prices made its operations unprofitable.

Despite the lower prices, demand from the stainless-steel industry, the main consumer of the anticorrosive metal, hasn't picked up. Instead, buyers appear to be hoping for even lower prices.

Nickel producers are being squeezed by energy prices and the rising costs of sulfuric acid, a key component to extract nickel laterite ores. Sulfur prices have rocketed from an average of just more than $100 a ton last year to more than $800 a ton.

The Price of Nickel is Down 30% January - August 2008