Emerging Markets See Demand for Nickel

Submitted by Emma Cox as part of our contributors program.

Emerging Markets See Demand for Nickel

For the past five years or so, we have been witness to a growing global economy, largely due to the participation of developing countries. Established and successful first-world nations such as the United States still play a crucial role, but attention has shifted to emerging markets such as Brazil, Russia, India, and China — the BRIC nations — which have a lot to offer now more than ever before.

Spotlight on these four revealed that their respective gross domestic product (GDP) is getting bigger at a much faster rate than Europe or North America — quite an achievement considering troubling global economic events in the past year, such as falling oil prices, the Russian-Ukrainian conflict, the recession in Japan, and more.

More new technologies such as mobile communications, modern systems, and a cultural consciousness are adapting to the changing times, their strong industries are their backbone, keeping them upright at the toughest moments.

An assessment by Ernst & Young showed that the 21st century is a time for “the dominance of emerging markets,” and that sooner rather than later, these developing countries will have more political and economic power, enabling them to go toe-to-toe with the US and EU in terms of trade and investment.

ICEF Monitor further notes that emerging markets in BRIC nations “will be among the world’s largest ten economies by 2020.” As we are nearing the halfway point of this decade, this forecast remains a bright spot for analysts and investors alike.

The rise of urban populations with a young demographic, especially in China and India, will see the creation of more businesses and infrastructure, thus bolstering a greater demand for base metals, especially nickel, which is an important component in making stainless steel. Says Narayana Murthy, chairman and founder of Infosys, based in India: “While the US and the European markets continue to be important for us, the Indian market is growing rapidly. The base is small right now, but the growth rates are huge. There are many large software project opportunities in India. Much of it comes from the Government and public sectors — it’s the same in China and Brazil. As we move forward, we will have a more balanced portfolio between the developed markets and the developing market.”

Nevertheless, since Indonesia is still enforcing its iron ore export ban, consumers are forced to look elsewhere for new suppliers. While the Philippines is currently a worthy enough alternative, some experts are also looking to BRIC nations helping one another out. After all, Brazil has Vale (NYSE:VALE), while Russia has Norilsk Nickel (OTCMKTS:NILSY) and Amur Minerals Corporation (OTC:AMMCF), the latter touted as having one of the biggest nickel-sulphide projects in the world, with more than 120 million tonnes of mineralization in recorded reserves.