Nickel futures are standardized, exchange-traded contracts in which the contract buyer agrees to accept delivery of a certain quantity of nickel (e.g. 6 tonnes) from the seller at a predetermined price on a future delivery date from the seller.
Is it possible to buy nickel futures?
You can profit from a rise in nickel price by establishing a long position in the nickel futures market if you are optimistic on nickel. You can do this by purchasing one or more nickel futures contracts on a futures exchange (going long).
Example: Long Nickel Futures Trade
At a price of USD 10,100 per tonne, you decide to go long one near-month LME Nickel Futures contract. The value of each LME Nickel Futures contract is USD 60,600 since each contract represents 6 tonnes of nickel. To initiate a long futures position, you will only need to deposit an initial margin of USD 14,400, rather than paying the whole contract value.
Assume the price of nickel rises a week later, and the price of nickel futures climbs with it to USD 11,110 per tonne. Each contract now has a value of USD 66,660. So, by selling your futures contract now, you can earn USD 6,060 on your long position in nickel futures.
What are my options for investing in nickel?
Series B iPath Total Return of the Bloomberg Nickel Subindex An exchange-traded note (ETN) follows one nickel futures contract at a time. Despite the fact that this ETN only has about $50 million in assets, it is the most direct option for U.S. investors to gain exposure to the volatile nickel market. (Purchasing futures directly is more difficult.)
JJN, on the other hand, is an ETN, or exchange-traded note, which is a type of debt issued by a bank, in this case, Barclays. An ETN does not own anything, unlike an ETF, which buys and retains the underlying stocks. The backer of the Note (in this case, Barclays) guarantees to pay the underlying futures contract back. Because the ETN does not hold stocks, it may perfectly match the contract’s return, avoiding tracking errors. However, because the ETN carries the issuer’s credit risk, investors may not receive their money back if Barclays goes bankrupt (which appears improbable).
iShares MSCI Global Metals & Mining Producers ETF (PICK)
The iShares MSCI Global Metals & Mining Producers ETF (PICK), which was launched in 2012, is a prominent metal and mining ETF. It monitors a metals and mining index that excludes gold and silver.
PICK is a diverse portfolio with roughly 210 holdings, with BHP Group, Rio Tinto Plc, and Vale as the top three. BHP, Vale, Glencore, IGO Ltd, Nickel Mines Ltd, and Jinchuan Group are all nickel producers. Nickel-related interests account for more than a quarter of the fund’s assets, which is a significant amount, even though diversified mining corporations like Glencore and BHP mine metals other than nickel.
Although the fund manager does not say how much of the fund is invested in nickel, it should be included in the diverse metals bucket, which accounts for approximately half of the ETF’s assets. Steel (about 30%), copper (approximately 10%), aluminum (around 5%), and precious metals (around 5%) are some of the other metals PICK invests in (3.5 percent ).
Amplify Advanced Battery Metals & Materials ETF (BATT)
BATT is a venture capital firm that invests in companies that profit from lithium battery technology, such as battery storage, battery metals, and electric vehicles. It was founded in 2018. This isn’t a metals and mining ETF; it’s a thematic battery ETF. Metals and mining account for around a third of the fund’s holdings; the rest is split between electric automobiles and components, electric equipment, chemicals, electronics, and other stocks. BATT has a decent expense ratio of 0.59 percent.
The ETF holds roughly 80 stocks, with each investment capped at 7%. EV battery maker CATL, Tesla, and mining behemoth BHP Group are the top three equities. BHP (in the top three), Glencore, IGO Ltd, Vale Indonesia, and Jinchuan Group are among the nickel miners. Nickel stocks account for around 15% of the ETF’s assets when totaled.
BATT is a themed approach to invest in lithium-ion batteries, rather than nickel directly.
VanEck Green Metals ETF (GMET)
The VanEck Green Metals ETF, which debuted in November 2021, tracks the MVIS Global CleanTech Metals Index, which invests in green metals producers, refiners, processors, and recyclers. Green metals are metals that help people make the switch from fossil fuels to renewable energy. Nickel, cobalt, copper, and lithium are among them.
GMET is a new company with around $25 million in assets. Glencore and Jinchuan Group, two of the world’s largest nickel producers, are among the fund’s 48 holdings. (However, mining conglomerates such as Glencore sell other metals, thus nickel only accounts for around 5% of Glencore’s revenue.) Overall, we discovered that big nickel producers accounted for around 14% of this ETF’s assets.
GMET is a worldwide exchange-traded fund that invests in China, Australia, and the United States. It has a cost of 0.59 percent.
Global X Disruptive Materials ETF (DMAT)
The Global X Disruptive Materials ETF (DMAT), which was just launched in 2022, invests in U.S. and international stocks that earn at least half of their revenue from mining or refining carbon fiber, cobalt, copper, graphite, lithium, manganese, nickel, platinum and palladium, rare earth elements, and zinc.
Stocks must have a market capitalization of at least $100 million to be considered. Nickel producers Sibanye Stillwater, Igo Ltd, Nickel Mines Ltd, and Western Areas Ltd are among the fund’s holdings.
Is nickel available as a commodity?
After iron, oxygen, silicon, and magnesium, nickel is the fifth most common element on Earth. It is a naturally occurring metal that is found and mined in the same way as copper and other metals from the Earth’s crust. Nickel is mined in open pits or underground processes, depending on the sort of ore it is found in. Its desired features make it suitable for alloy production since it adds corrosion resistance, hardness, strength at high and low temperatures, as well as magnetic and electrical capabilities. Because of its capacity to endure high heat, nickel-containing items have a substantially longer life cycle without needing to be replaced, making them suitable for usage in severe environments such as jet engines, offshore installations, and power generation facilities.
Sulphide ores are crushed and processed to liberate nickel minerals, which are then separated from the less valuable material by selective flotation or magnetic separation. The nickel concentrate is purified through flash smelting, leaching, and other processes, resulting in a higher grade of nickel that may be sold and used to make stainless steel, nickel-containing alloys, batteries, and catalysts, as well as plating for other metals.
How is Nickel Traded?
Pure nickel is used in only a few items. Nickel is one of the most valuable mined elements due to its numerous applications, which can have a considerable impact not only on the businesses that rely on it, such as stainless steel and nickel-containing alloy production, but also on the economy of entire countries.
New Caledonia has the second-largest nickel reserves behind Australia. Brazil, Russia, Cuba, Indonesia, South Africa, Canada, and China all have large nickel reserves. The Philippines, Russia, Canada, Australia, New Caledonia, Indonesia, Brazil, China, Guatemala, and Cuba are the countries that generate the most nickel, in descending order.
Asia accounts for over 70% of total global nickel demand, with China alone accounting for around 52% of total demand. Consumption is inextricably related to the stainless steel industry, which is growing rapidly, particularly in Asia.
Nickel is one of the most recycled materials on the planet, usually in the form of alloys, and because nickel is infinitely recyclable, it accounts for almost half of the nickel content in stainless steel goods today.
Nickel can be traded in futures and options contracts on the financial market to reduce risk by locking in selling and buying prices. Speculators who want to profit from market movements by taking on price risk also trade them (more about commodity trading).
What does nickel trading entail?
The Most Important Takeaways A 0.05 percent movement is referred to as a nickel. Traders in the foreign exchange, commodities, and derivative markets frequently use it. Traders may utilize nickels to predict the possible earnings or losses that may be incurred as a result of external occurrences.
Is there an exchange-traded fund for nickel?
Bloomberg Nickel Subindex Total Return ETN (iPath Bloomberg Nickel Subindex Total Return ETN) (JJN) The price of nickel futures contracts is tracked by this ETF. It is one of the most well-known exchange-traded funds (ETFs) on the market.
Is it possible to purchase nickel bars?
Nickel bars are available in bulk or in small quantities. The AE BullionTM group may also develop and purchase portfolios of different elemental metal bars or coins, providing for strategic risk allocation and indexing across a basket of metals.
Tesla gets its nickel from where?
Musk secures a crucial U.S. source of the metal for Tesla battery facilities in Texas and Nevada by sourcing from Talon’s Minnesota project, a joint venture with Rio Tinto (RIO.AX) planned to open by 2026, while also decreasing the company’s supply lines. Last year, the automaker secured nickel supply agreements with BHP (BHPB.L) and BHP.AX in Australia, as well as New Caledonia.
Although Indonesia is the world’s top nickel producer, miners there often utilize energy-intensive technologies to extract the metal and engage in controversial waste disposal techniques such as dumping waste rock into waterways.
Talon Metals intends to deploy technology that it expects will allow it to absorb carbon dioxide from the atmosphere and chemically link it to rocks discovered inside its Tamarack project in northern Minnesota, allowing it to store it forever. The technique, which is currently being tested, would basically allow Talon to offer nickel as carbon-neutral, which would be a significant selling point for Musk and Tesla.
In a press statement, Tesla executive Drew Baglino stated, “Responsible sourcing of battery materials has always been a concern for Tesla.”
Tesla intends to purchase 75,000 tonnes of nickel concentrate, as well as smaller volumes of cobalt and iron ore, at LME-listed prices over the next six years. Tesla hasn’t said where the nickel concentrate will be refined yet. There is no nickel refinery in the United States.
Just before the news was revealed, Talon’s stock was stopped. Tesla’s stock increased by 3% on Monday.
Talon’s CEO, Henri van Rooyen, stated in a statement, “Talon is thrilled to help Tesla’s objective to accelerate the transition to renewable energy.”
The automaker signed a lithium supply agreement with Piedmont Lithium Inc (PLL.O) for its Texas battery factory in 2020, but the agreement was halted last year due to mounting resistance to Piedmont’s proposed mine in North Carolina.
Will the price of nickel rise?
The nickel price is predicted to fall to $22,526 per tonne in 2023, according to ANZ Research, while LME nickel is expected to fall to $22,000 per tonne by March 2023, according to UBS.
Forecasting service based on algorithms Nickel prices are expected to grow to $32,455.4 per tonne by December 2023, up from $29,263.8 per tonne in December 2022, according to Wallet Investor. In December 2025, the metal was anticipated to hit $38,835.1 per tonne.
It’s crucial to remember that predictions might be inaccurate when it comes to analyst comments and algorithm-based nickel price expectations. You should conduct your own investigation. Remember that past results are no guarantee of future results. Also, never put money into an investment that you can’t afford to lose.
What makes nickel so costly?
Sources informed Reuters that the increase in nickel was due to short-covering by one of the world’s largest producers. Buyers rushed to get supplies on the spot, which are critical for electric vehicle batteries and stainless steel.