With the price of raw nickel more than doubling in just one day last week, U.S. electroplaters and finishers are scrambling to keep up with the price increases they will soon be facing.
Jaime MaliszewskiShops such as Reliable Plating Works in Milwaukee say they will be looking at raising prices soon and will be explaining the increase to customers.
"For plating only customers, this could be between 40% and 50% surcharge," says Jaime Maliszewski, RPW president. "For polish, vibratory, and plate customers, it could be between 20% and 30% surcharge."
Reuters reported that the London Metal Exchange (LME) halted trading March 8 for raw nickel, while aluminum retreated from record highs. LME's three-month nickel was up 66% at $80,000 a ton when trading was stopped, having earlier been driven to a record $101,365/ton.
Many of the worries are oversupply delays and logistics headaches resulting from Russia's invasion of Ukraine.
Taking a Wait-and-See Approach
Matt LindstedtMatt Lindstedt, president of Advanced Plating Technologies in Milwaukee, says they are taking a wait-and-see approach to raise prices until they see how the nickel costs do over the next several weeks.
"We just had our most significant price increase last fall, so we hate to do that again to our customers," Lindstedt says. "We'll monitor to see what the price fluctuates at, but this is truly a crazy time. You just have to wait and see where the dust settles."
Joel Clemons, Director of Quality and a Managing Member of Elite Metal Finishing in California and Florida, says, for now, they are only raising their minimum charges and increasing their pricing to cover the rise in nickel costs.
"Our quotes are good for 30 days, so there may be a few 'lean' jobs," Clemons says. "But, ultimately, we have to continually raise prices."
George Gatto Jr., president of Gatto Industrial Platers in Chicago, has been waiting on news of pricing from his supplier but says their zinc-nickel chemistry will likely be affected.
"We will also probably see some increases in price for the racks and fixtures we use in our aluminum chromate line," Gatto says. "We use stainless steel for the fixtures. I'm not yet sure how much of an impact this will have on our overall costs."
Prices Continueing to Rise
Maliszewski says that RPW is in a contract for nickel this year that guarantees them their annual supply so that they will always have nickel to run product. He says it also guarantees their premium markup will never be above $1.25/ton, but trading was stopped as it reached over $45/ton, and premiums have gone over $12/ton.
"By the week of March 21, we will have to make another purchase of nickel, and we will be forced to add nickel surcharges to our invoices to cover this additional cost," Maliszewski says.
Elliott Blackwelder, president of Seminole Metal Finishing in Altamonte Springs, FL, says they were fortunate that they ordered a several-month supply of EN chemicals at the end of last year.
"We are good until the end of June on EN plating," says Blackwelder, who got a quote last week for bright nickel plating that was from $24.90 to $49.10.
"That is going to be a problem until it comes back to reality," he says. "I doubt my customer would pay these prices. But I am not sure what alternatives are out there. If I have to, we will temporarily discontinue our bright nickel line if we can't nickel metal for a reasonable price."
Russia supplies the world with about 10% of its nickel needs and also produces about 6% of the world's aluminum. Reuters reports that the buying frenzy whipped metals prices higher in early trading, with zinc jumping as much as 18.4% to a record $4,896 a ton while lead rose as much as 9.4% and tin hit a record $51,000.
"This market is absolutely insane," says ING Senior Commodities Strategist Wenyu Yao. "The fundamentals alone won't be able to explain these prices."
Inventories at 75,012 Tons
Inventories of nickel in LME-registered warehouses stand at 75,012 tons, their lowest since 2019. Stocks of aluminum are at their lowest since 2007 at 779,350 tons.
Lindstedt says with all that has happened in the world in the last two years — from the pandemic to worker shortages, and now to wars that raise prices even higher — it is even harder to run a business these days.
"The cup of coffee that I used to buy for under $2 each morning last year is now over $3, and it makes you wonder what caused something like that to go up 50% in so quick a time," he says. "Being a business owner today makes me feel like I'm in a heavyweight fight, and I'm in the 17th round, and yet I'm still taking body blows. Some of it makes no sense."
