Nickel based alloys such as Monel 400, Inconel 718, Inconel 600, Inconel 625 have widespread industrial uses. These alloys are most widely used in highly corrosive environments or high temperature environments. The price of nickel has skyrocketed over the last several years and demand has increased creating short-term shortages of material.

Bloomberg.com reports on May 10, 2006 "Nickel futures rose to a seven-month high in London as demand from stainless steel producers, the largest users of the metal, caused a shortage." For those of us in the supply base for nickel base alloys, this is nothing new. We have seen prices of nickel base alloys such as Monel 400,Inconel 600, Inconel 625 or Inconel 718 double and triple since the 1990's.

Lead-times for procurement of these materials have increased dramatically. It is not uncommon for a metal producer to quote lead times over 26 weeks and prices are not firm until date of shipment! This has caused a lot of concern to manufacturers and end users of nickel based alloys. There seems to be no way to predict what your product costs are going to be 1 month, 6 months or 12 months from now.

There is no end in sight for the current economic situation for nickel base alloys. One of the reasons for the surge in demand subsequent price increase of nickel is China. Bloomberg.com also reports " there won't be much new production until 2007 and stainless steel production is increasing very quickly in China". (Stainless steel contains significant amounts of nickel).

What does this mean for producers of OEM products using nickel alloy products? Fasten your seatbelts it's going to be a rough ride!