What’s More Expensive Copper or Nickel? A Look at Copper Prices & Nickel Prices Post Covid
Nickel and Copper enjoyed a spectacular performance in 2020 and 2021, reflecting substantial global demand in nickel and copper prices.
The underlying logic is that many countries conducted easing monetary policies. And implemented fiscal stimuli in response to the COVID pandemic. Against the backdrop of economic recovery, base metals like copper and nickel rallied. Fueled from not just demand, but also speculation as well.
Nickel prices increased by 32.33% and Copper prices jumped by 39.65%. From the date that COVID became officially declared as a pandemic till the end of the year 2020.
The uptrend continued into 2021 and the annual returns of Nickel and Copper are 19.26% and 24.31% respectively.
In the pre-COVID year 2019, the price of JJC went around the mean of $14.04 with an annual volatility of 0.590. In comparison, JJN price went through a swing and hit a high of $24.64 in September and fell back to the mean level of $18.72 in the fourth quarter. JJN’s high volatility of 2.693 was contributed by Indonesia announcing a ban on nickel ore exports, which led to nickel price soaring in July and August driven by supply worries.
JJC price started escalating from the historical lowest level of $11.01 on March 19, 2020 and remained in an upward channel for the year 2020 and the first half of 2021. During the period, the 50-day SMA shows a relatively consistent uptrend at a slope of about 0.044. In the second half of 2021, JJC price fluctuated around mean $21.82 with volatility 0.629.
JJN prices went up since the beginning of April 2020, a week later than copper. The uptrend had a slope of 0.048. Until the trend was disrupted by a two-week price fall of 20.59% occurred at the end of February 2021. Nickel price stabilized in April and entered another upward channel with a flatter slope of 0.023.
Since the inception of COVID, both JJN and JJC prices experienced greater fluctuation.
Copper appeared to have a stronger performance in 2020 because major copper suppliers like Chile and Peru became affected severely by the pandemic, while there was an oversupply in the 2020 global nickel market.
Overall, JJN had higher volatility and the nickel market proved turbulent with wild price moves. In March 2022, JJN price reached $67.50 with trading volume of 833,415 against a massive, short bet of Tsingshan Holding group. JJN fell back to the normal level around the mean $33.60 in June. Recent pessimism toward metal prices includes recession fears and few good signs of China’s economic recovery after COVID resurgence in the nation.
