Since nickel is such an integral part of why stainless steels are so widely used, anyone working with stainless steel must be aware of the price of nickel.
About two-thirds of all nickel that is mined in the world is used in the production of stainless steel. Because of this, the prices of nickel and stainless steel are almost always directly correlated. As demand increases in the need for stainless steel, the nickel market reacts by trying to match the demand.
For instance, in 1999 there was an increase in demand for stainless steel, which caught nickel producers off guard. This was due in part to shipping issues held by distributors, as well as several Canadian nickel producers shutting down due to a strike. Once the price of nickel started to skyrocket due to a lack of supply, stainless steel prices began to soar as well. Prices on nickel and stainless didn’t level out for about a year until the production of nickel finally met the demand by stainless steel producers.
Although stainless steel products, such as stainless steel wire, stainless steel banding, and stainless steel strip coil, are heavily made from chromium, nickel is less abundant and more volatile. Throughout history, the pricing of stainless steel heavily follows the price of nickel, even though it only makes up a small percentage of stainless steel in mass. In stainless materials like 302, 303, 304, 304L, and 316L, nickel only makes up 8%-12% of the total mass of the material although it constitutes upwards of 65% of the cost.
In rare instances though, the cost of nickel may not be directly correlated to the price of stainless steel. For example, at the beginning of 2021, the price of stainless steel started to skyrocket despite the consistent decrease in the price of nickel. This anomaly has been caused by the incredible strain that has been dealt to the manufacturing supply chain as a result of the COVID-19 pandemic.