https://www.miningweekly.com

Nickel price to benefit from short supply, strong steel demand through 2019

12th September 2018

By: Reuters

  

Font size: - +

JAKARTA – Slower production increases in leading supplier Indonesia and continued growth in stainless steel demand are forecast to extend a supply shortage in the global nickel market, supporting price gains through 2019.

Nickel, which recently hit its lowest since December, could climb as high as $16 000 a tonne by the end of 2018 and $18 000 a year later, Macquarie Capital senior commodities consultant Jim Lennon said on the sidelines of the MetalBulletin 6th Asian Nickel Conference in Jakarta on Wednesday.

Nickel has been supported by stainless steel demand growth that exceeded 9% in the first half of 2018, Lennon said.

But concerns have emerged in recent months that global growth has peaked against the backdrop of an evolving trade war between the United States and China, dampening the outlook for the 2.2-million-tonne per year global nickel market, he said.

As a result, nickel prices had "overshot to the downside", he said, noting that he expects China to relax its credit policies and introduce measures to stimulate growth that would underpin steel demand, while nickel output growth will remain slow for the rest of 2018.

Supply disruptions at Eramet's mines in New Caledonia and China's planned pollution controls in 40 cities, coupled with slow output growth in Indonesia, could also support a recovery in nickel prices this year, Lennon said.

"Inventories are coming down so prices should be moving higher."

According to Norilsk Nickel principal nickel analyst Alexander Khodov, the global nickel market deficit could extend for three years from a shortfall of 120 000 t in 2018.

"Next year the deficit will probably slightly decrease as a result of a ramp-up in NPI (nickel pig iron) production here in Indonesia (and) a slight increase in NPI production in China, but the deficit will still be around 80 000," Khodov told Reuters.

Wood Mackenzie metals analyst Linda Zhang also forecast growth in nickel prices to $14 400 this year and $16 670 in 2019, with the market facing a deficit of 73 000 t this year and 63 000 tin 2019.

Nickel recovered from an 8-1/2 month low on Wednesday, but gains were capped by fresh sparring between Washington and Beijing over trade and by sinking steel prices in China.

Three-month nickel on the London Metal Exchange was bid up 1.2% in official midday rings to $12 375 a tonne, having hit its lowest since late December at $12 085.

Edited by Reuters

Comments

Showroom

Flameblock
Flameblock

FlameBlock is a proudly South African company that engineers, manufactures and supplies fire intumescent and retardant products to the fire...

VISIT SHOWROOM 
VEGA Controls SA (Pty) Ltd
VEGA Controls SA (Pty) Ltd

For over 60 years, VEGA has provided industry-leading products for the measurement of level, density, weight and pressure. As the inventor of the...

VISIT SHOWROOM 

Latest Multimedia

sponsored by

Hyphen, Eva mine, ferrochrome price make headlines
Hyphen, Eva mine, ferrochrome price make headlines
27th March 2024
Resources Watch
Resources Watch
27th March 2024

Option 1 (equivalent of R125 a month):

Receive a weekly copy of Creamer Media's Engineering News & Mining Weekly magazine
(print copy for those in South Africa and e-magazine for those outside of South Africa)
Receive daily email newsletters
Access to full search results
Access archive of magazine back copies
Access to Projects in Progress
Access to ONE Research Report of your choice in PDF format

Option 2 (equivalent of R375 a month):

All benefits from Option 1
PLUS
Access to Creamer Media's Research Channel Africa for ALL Research Reports, in PDF format, on various industrial and mining sectors including Electricity; Water; Energy Transition; Hydrogen; Roads, Rail and Ports; Coal; Gold; Platinum; Battery Metals; etc.

Already a subscriber?

Forgotten your password?

MAGAZINE & ONLINE

SUBSCRIBE

RESEARCH CHANNEL AFRICA

SUBSCRIBE

CORPORATE PACKAGES

CLICK FOR A QUOTATION







sq:0.118 0.153s - 112pq - 2rq
Subscribe Now