Nickel extended its two-year high on Wednesday with another strong performance that appeared linked to projected demand for electric vehicles.
On the London Metal Exchange, prices for three-month nickel rose 3.5% to 12,862.5 - a high not seen since May 2015. On Tuesday, the metal rose by 5.3%.
The metal, whose sulphate is used in powerful lithium-ion batteries that drive electric vehicles, was expected to see increased demand over the coming years.
Saad Rahim, chief economist at commodities trader Trafigura said he expected demand for nickel sulphate to increase by half to 3 million tons by 2030, Bloomberg reported.
Analysts at UBS, however, warned that about half of the world's supply of nickel ores, such as ferronickel and nickel pig iron grades, were unsuitable for battery production.
“Not everyone will be a winner,” Dan Lougher, chief executive of Western Areas told Reuters.
“We’ve met with quite a number of battery manufacturers, and they are quite specific on their requirements. Nickel is an important component of these batteries.”