Supply has finally caught up, and subsequently exceeded, demand in the Nickel market. This is likely to lead to the metal losing much of the value that it gained back in 2005 when Nickel mines were struggling to produce the supply to meet the rapidly rising demands of the Chinese market.

The Nickel market can generally be judged alongside the stainless steel one, with it being a proponent of the alloy. However it is now the worst performing metal on the London Metal Exchange, which may be a sign of things to come for other metals in the future.

According to forecasts from Macquarie, nickel output is set to rise 10.1 per cent this year and 11.3 per cent next year. This follows a period of practically zero growth in production, which had led to the initial boom in prices in the first place.

“I’m pretty bearish about nickel as you can see the supply coming on,” says George Cheveley, metals and mining portfolio manager at Investec Asset Management. Its a sentiment shared by many industry insiders who can see that the metal is potentially heading for a further fall.

Jim Lennon, Macquarie’s head of commodities research, added “Future surpluses suggest lower nickel prices, and we now feel that $20,000 per tonne could be breached.”