Nickel is emerging as an exception to the long-term deterioration seen across much of Africa’s commodity exports, with its trade terms showing a slightly positive trend despite repeated structural shifts in the market, according to an Afreximbank research paper.
The study, Revisiting the Singer-Prebisch Hypothesis: Commodity Price Volatility in Africa, identified five structural breaks in nickel’s trade terms between 1960 and 2024, the highest number recorded among the commodities examined. The breaks occurred in 1969, 1987, 1996, 2005 and 2015.
The findings distinguish nickel from many of Africa’s traditional commodity exports, which the study says generally show long-term deterioration or stagnation following temporary price improvements.
For nickel, however, the researchers found that its long-term trend was non-negative, suggesting that the commodity has diverged somewhat from the broader pattern predicted by the Singer-Prebisch hypothesis.
Demand and supply are reshaping nickel
The report links the structural changes in nickel to developments in global industrial demand and supply. It identifies the expansion of stainless-steel production and growing demand for battery metals as factors influencing nickel’s market trajectory. The 2015 structural break is associated with Indonesia’s restrictions on nickel ore exports, alongside supply disruptions and the early shift toward battery-related demand.
The findings suggest that nickel’s market has been shaped not simply by conventional commodity cycles but by changes in how the metal is used and supplied globally.
That makes the commodity different from agricultural exports such as cocoa, cotton and tea, which the study says remain more strongly exposed to the long-term deterioration and stagnation associated with the Singer-Prebisch pattern.
Five structural breaks in six decades
The frequency of nickel’s structural changes is notable within the study’s broader analysis. The researchers found multiple structural breaks across several major commodities, reflecting changes in global demand, supply conditions, policy, technology and major economic shocks. Nickel recorded five, compared with four for oil, natural gas, gold, platinum and several other commodities.
The report’s methodology allows for multiple breaks because commodity markets can move between different regimes rather than follow a single uninterrupted trend. The researchers say this approach provides a more realistic representation of commodity-price behaviour shaped by repeated shocks.
Nickel offers a departure from the broader pattern
The broader findings of the study are less favourable for Africa’s commodity exporters. The research says most of the 29 commodities examined experienced long-term deterioration or stagnation in their terms of trade, with improvements following global shocks often proving temporary. Agricultural and forestry commodities show the strongest evidence of the Singer-Prebisch pattern, while some metals have displayed greater resilience.
Nickel is among the commodities that depart from that pattern.
The finding does not mean nickel is immune to volatility. Rather, it indicates that structural changes in demand and supply have produced a different long-term trajectory from the stagnation observed across much of Africa’s traditional commodity basket.
Implications for African commodity producers
The nickel findings strengthen the report’s broader argument that African countries need to understand how structural changes in global commodity markets can alter the long-term value of their exports.
The researchers recommend that commodity-dependent economies pursue industrial upgrading, value addition and diversification rather than rely on periodic price booms. They also call for stronger infrastructure, energy and logistics systems and regional value chains that can allow African countries to capture more value from their natural resources.
The AfCFTA could support that transition by providing a larger regional market for processing and higher-value production, although the report cautions that infrastructure gaps, limited industrial capacity and non-tariff barriers could constrain the gains.
Overall, the nickel case shows that Africa’s commodity story is not uniform. While much of the continent’s traditional export basket remains caught in a cycle of price shocks followed by stagnation or deterioration, commodities undergoing major shifts in industrial use and global supply can follow a different trajectory.
