Nickel

What is Nickel?

Nickel is a chemical element with symbol Ni and atomic number 28. It is a silvery-white lustrous metal with a gold tinge. Nickel belongs to the transition metals and is hard and ductile.

Pure nickel shows a significant chemical activity that can be observed when nickel is powdered to maximize the exposed surface area on which reactions can occur, but larger pieces of the metal are slow to react with air at ambient conditions due to the formation of a protective oxide surface.

Uses of Nickel

Nickel is classed as a alloy metal with its main use in nickel steels and nickel cast irons, where there are many varieties.

Nickel consumption can be summarized as: nickel steels (60%), nickel-copper alloys and nickel silver (14%), malleable nickel, nickel clad, Inconel and other Superalloys (9%), plating (6%), nickel cast irons (3%), heat and electric resistance alloys, such as Nichrome (3%), nickel brasses and bronzes (2%), others (3%).

Nickel can be used as a catalyst for hydrogenation, more often using Raney nickel. This is a finely divided form of the metal.

Nickel is used in a wide array of industrial and consumer products. These can include, but not limited to:

  • Stainless steel
  • Magnets
  • Coinage
  • Special alloys
  • Plating 
  • Green tint in glass
  • Coins

Risks of Nickel

Like any futures contract, there is always the possibility that the underlying asset i.e. nickel will move in the opposite direction to which you hold your contract. For example: you have taken a long position (expecting the price of nickel to rise), if this were to happen and the nickel fell in price, your long position in nickel will decrease in value.

With any commodity, supply and demand will affect the price dramatically if there is a change, this risk is one that should be monitored on a regular basis and adjusted to suit your risk parameters.

Mining of metals has an inherent risk with the level of costs associated with extracting the product from the earth. This can include but not limited to the cost of oil to fuel machinery, cost of labour or new tax regulations being implemented.

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