Industry analysts said that nickel will take years to recover from a price slump that's wiped out almost 80% of the metal's value in the past 18 months.

Mr Carey Smith an analyst at corporate advisory and stock broker Alto Capital said that a realistic price over the next few years is probably about USD 15,000 to USD 17,000 a tonne.

As per report nickel fell by USD 176 or by 1.6% to USD 10,524 a tonne on the London Metal Exchange. He added that "The high nickel prices of the past two or three years are gone. The selling is not due to fundamentals, it's hedge funds and other hot money rushing to get out of the market.''

According to Nickel Institute, nickel has more than halved this year as the credit crunch widened, threatening a global recession and cutting demand for metals. The falling price means some of Western Australia's 250 companies exploring for the metal in a state four times the size of France will go bust.

Mr Stephen Barnett president of Nickel Institute said that "The lower nickel price is certainly putting the industry under stress and will lead to closures, especially for some of the higher cost operations. Metals will recover when the economy recovers. When that is, is anyone's guess.''

OAO GMK Norilsk Nickel on October 17th 2008 halted operations at its Cawse mine and ore processing plant in Western Australia, blaming rising costs. The decision does not affect Norilsk's other Australian nickel operations at Black Swan, Lake Johnston and Waterloo, which continue to perform well.

Meanwhile, POSCO said that it will slash planned output by about a third this quarter and rival South Korean steelmakers may also cut production to cope with a slowdown in demand. Global consumption of nickel dropped for a fifth straight month in August to the lowest since September 2007.