Why are nickel so expensive?
The price difference between mined nickel and its finished product can be attributed to several factors:
1. Processing and refining costs: The cost of mining nickel involves a variety of expenses, including labor, equipment, energy and infrastructure. However, mined raw nickel typically requires further processing and refining to convert it into a usable metal. These additional refining processes may incur costs that impact the final price of the finished nickel.
2. Market demand and supply dynamics: The price of raw materials such as mined nickel is affected by market supply and demand forces. The cost of mining nickel is affected by factors such as global demand for the metal, geopolitical events, production levels and market speculation. When sold as finished goods, prices may also reflect current market conditions, industry demand and the availability of refined nickel.
3. Value Added and Labor Costs: Converting mined nickel into finished products involves adding value through processing, refining, alloying, forming and sometimes additional processing. These value-added processes can increase the value of the finished product beyond the cost of the raw material itself.
4. Economies of scale and efficiency: Larger-scale production facilities and efficient manufacturing processes for manufacturing nickel finished products can bring economies of scale, reduce unit production costs, and make finished products cheaper than raw materials.
5. Quality and Grade: The quality, grade and purity of finished nickel products may vary, thereby affecting its market price. Some finished products may have undergone additional treatments or processes to improve their quality, making them more valuable than the raw nickel that was mined.
Overall, the price difference between mined nickel and its finished product is due to value addition, processing, refining, market dynamics, and various factors involved in converting raw materials into usable, marketable metal.
