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Nornickel Expects Global Structural Deficit in Nickel Market after 2020

Metal News - Published on Thu, 28 Nov 2019

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Nornickel, in alliance with ICBC Standard Bank, has prepared a report on nickel markets. Nornickel Head of Marketing Mr Anton Berlin said “We register growing demand for high grade nickel from Europe, where steelmakers have been changing their feedstock mix. Automotive battery manufacturers are also buying more, meaning that in the long term we still expect a global structural deficit in the nickel market after 2020.”

A major focus of our research was on the stainless steel market, which accounts for more than 70% of the global nickel consumption. This year was marked by extensive trade wars affecting local and external markets likewise. Asia-Pacific was a key market in terms of nickel production and consumption, with a tide wave in Indonesia’s stainless steel output prompting China to introduce a protective duty on its imports. This step forced Indonesian companies to look at other markets in the region and focus on making nickel pig iron to trade with China.

Price dumping by Asian steel manufacturers and protectionist moves by the US administration are forcing local players to adopt defensive strategies against stainless steel imports, triggering full-blown rebalancing on the local market. For example, a decline in scrap prices in Europe came as an additional incentive for crude ferronickel replacement. A rise in scrap processing, in its turn, had a positive impact on Nornickel, the largest global producer of high grade nickel exporting some 50% of its non-ferrous and precious metals to Europe.

Nornickel experts emphasize persistent growth in demand from car battery manufacturers, while also expressing doubts that the announced new crude ferronickel production capacities in Indonesia will be enough to meet the increasing demand in the long term. The Indonesian decision to introduce a ban on nickel ore exports ahead of the schedule is yet another factor fuelling general uncertainty and market volatility.

Nornickel’s expert team believes that 2020 will become a transitional year for the industry. The current market situation is not expected to change materially any time soon, with the status-quo supported by ongoing increases in NPI production volumes in Indonesia, and growing supplies of nickel ore from the Philippines, New Caledonia and Guatemala. After 2020, however, the market is most likely to face structural deficit.

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Posted By : Rabi Wangkhem on Thu, 28 Nov 2019
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