Like most other commodities, nickel prices have been struggling, especially when compared with the all-time highs reached 10 years ago.

But the outlook for nickel prices looks like it is about to change.

Nickel is mainly used in the production of stainless steel, thanks to its corrosion-resistant properties. This is responsible for 68% of first-use, that is, not recycled, nickel demand.

It is also used in many other ways, such as in rechargeable batteries, because of its toughness and its unique electronic and magnetic properties.

Interestingly the nickel -- the U.S. five-cent coin -- is just 25% nickel, the rest being copper.

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Nickel has been used by humans for more that 5,000 years, making it one of the oldest metals in use.

It is also one of the most common elements in the world. Only iron, oxygen, silicon and magnesium are more abundant.

However, just half of the nickel on Earth is actually mineable and/or economically viable to process.

Nickel prices are at about the same level that they were in 2003, and they have been at $10,000 per metric tonne or less for most of this year. However, nickel prices have climbed about 13% since the beginning of the year.

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Nickel prices hit an all-time high in 2007 of $53,750 per tonne. Today's prices are 82% below that.

They are also 53% below the most recent peak set in May 2014 of $20,966.

The dramatic change in nickel prices comes down to one main reason: China.

In the middle of the last decade, China's manufacturing sector was booming. As a result, demand, and therefore the price of nickel, exploded.

In 2006, at the peak of China's commodity boom, nickel prices climbed 146%.

The high demand and high prices inevitably led to a surge in global nickel mining and production. This led to an increase in the global nickel supply.

Then when the global economic crisis began in 2008, China's demand for nickel, and demand from the rest of the world, fell. With a lot less demand and increasing supply, nickel prices collapsed.

So for a number of years the world has had too much nickel. But things may be about to change.

For five years, nickel supply was higher than demand. For the first half this year, though, there was a nickel shortfall of 36,800 tonnes or about 1.5% of 2015's global production, and it is likely that this deficit will grow for the rest of the year.

The Philippines is the world's largest nickel producer and accounts for 21% of global supply. Last year, it produced 530,000 tonnes of nickel, but Philippine nickel production has declined this year, for two main reasons.

First, with falling prices there is less incentive for miners to produce more nickel.

There isn't much point in mining more nickel if it isn't as profitable. During the first five months this year, lower production from the Philippines caused the global nickel supply to drop by 5.3%.

The second reason is Rodrigo Duterte, the new president of the Philippines. After taking office on June 30, he began a nationwide environmental crackdown on all mining companies and gave them the option of either strictly following government standards or close down.

Since then, eight of the country's 27 nickel mines have been suspended. It is forecast that the closures will cut the country's nickel output by 10%, equating to 2% of global production.

Filipino mines usually produce less nickel from July to January anyway. So the full effect of these closures, and the subsequent impact that they will have on nickel prices, may only be felt next year.

China consumes most of the world's nickel, with 52% of global demand. Overall, Asia uses 71% of the world's nickel supply.

A lot of China's demand is used in the production of stainless steel, and the country's production of stainless steel grew by 7% in the first half this year.

With more than two-thirds of all nickel production being used for stainless steel manufacturing, China's increasing stainless steel production will have an impact on the global demand for nickel. This, in part, explains why investment firm Macquarie, and others, has increased its global nickel demand growth forecast to 4.4% from 1.3%.

The blossoming electric-vehicle market will also boost demand for nickel. Projections indicate that electric-car production will triple by 2020.

All these cars will either use lithium-ion batteries, which will increase demand for lithium, or nickel-metal hydride batteries.

Norilsk Nickel, Russia's largest nickel producer, predicts that the use of nickel in car batteries will more than triple, to more than 100,000 tonnes by 2020 from 30,000 tonnes in 2014, representing about 3.5% of global supply.

More demand and less supply will create a global nickel deficit. Brazilian company Vale, the world's largest nickel mining company, predicts that the deficit will hit 50,000 tonnes or about 2% of last year's total production.

As a result of the last 10 years of over-production, the world still has a lot of nickel stockpiled. But the growing deficit will make an impact on stock levels and will help steadily boost prices over the next few years.

Fitch Ratings estimates that the cost per tonne of nickel will average $9,000 this year, climb to $10,500 per tonne in 2017 and average $11,500 per tonne by 2019.

Investors can invest in nickel through exchange-traded products.

Choices are somewhat limited, but the largest is the iPath Bloomberg Nickel Subindex Total Return Exchange-Traded Note (JJN) - Get Report , which provides exposure to nickel prices by investing in nickel futures contacts.

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By ETP standards, it is a small fund with about $10 million in assets under management. But it is one of the few ways to play the nickel market without physically owning nickel or nickel mining shares.

Kim Iskyan is the founder of Truewealth Publishing, an independent investment research company based in Singapore. Click here to sign up to receive the Truewealth Asian Investment Daily in your inbox every day, for free.

This article is commentary by an independent contributor. At the time of publication, the author held no positions in the stocks mentioned.