Nickel price increases likely to put pressure on plastic automotive components says UK manufacturer

A UK manufacturer of a metal-plated plastic automotive components says the increasing price of nickel is likely to put pressure on the price of parts.

David Brereton, Sales Director for Essex-based Borough Ltd, says the steady upward price increase of nickel could create “a knock-on effect” when it comes to the manufacturing process.

“We have worked hard over decades to perfect our ability to chrome plate plastic components and nickel plays a critical role,” explained Brereton.

“To make the plastic components electronically conductive, we deposit a layer of nickel over a catalytic palladium layer during a chemical dipping process, before we can add the copper, more nickel layers and chrome that ensure the quality finish top marques demand.

“It is the nickel and the way we apply it that allows us to deliver not only the bright chrome required for exterior trim, but the satin finish finding favour for interior highlights and touch points.

“Plastic is now the substrate of choice for its weight saving characteristics, but we still rely heavily on a variety of metals to complete our components, to provide the look and feel required by our clients.”

Since July 2017, the price of nickel has steadily increased, almost doubling in price and experiencing its biggest one-day increase since 2008, jumping 10 per cent.

Brereton believes the increases could reflects its growing use in batteries as demand grows for electric vehicles and large-scale energy storage, but also the global political situation affecting supply.

For example, one of the main contributing factors to the increase came earlier this year, with concerns about Russia’s supply of the metal following US sanctions against Russian aluminium producer, Rusal.

Prices for nickel rose to a high of $15,875 per tonne, the highest level since 2014, as traders expressed concerns that metal from Russian producer, Norilsk Nickel, might be impacted if sanctions on Russia expanded to other companies.

Another contributing factor is China doubling its imports to 6.6 million tonnes in the first quarter of 2018, compared to the same time last year.

“There is no getting away from the importance of Nickel in UK manufacturing and the automotive supply chain in particular,” Brereton continued.

“Like all component manufacturers we will be forced to adjust internal pricing strategies to accommodate for these market uncertainties, but given the rises there is a limit to how long we can contain the impact.

“There are approximately 30,000 separate components needed to build an average car, including the smallest screws and Nickel features extensively, so any further rises in Nickel prices must impact the prices consumers pay on the forecourt.

“Market volatility is nothing new for manufacturers like Borough, but for customers and consumers it’s important to understand how seemingly unrelated issues such as sustainable energy and political sanctions can spark an economic chain reaction that impacts everyone,” he concluded.