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"Norilsk Nickel" Experts promise metal deficit in 2015

1 September 2014

Specialists of «Norilsk Nickel» confident in the future of nickel deficit in the next year, and what was reported in the press release, highlights the results of the first half. Analysts «Norilsk Nickel» believe that the increased volumes produced in China rough ferronickel and yet rather low demand for the metal from the developed countries in the past year to a great extent influenced by the fall in value to the level of 13.5 thousand. USD. This figure is the lowest since 2009. However, the most significant factor that had a negative impact on the global nickel market was the Indonesian ban, adopted in January of this year and banning the export of raw nickel materials with the percentage of nickel content lower than 4%. As a result, the volume of imports of Indonesian ore to China in May 2014 came to naught, a further step was a gradual decrease in inventories of products in Chinese ports. As a result, the May price of nickel reached the mark of 21 thousand. USD per ton, and, despite the relatively high level of supply in the first 6 months of this year, the price of nickel increased gradually in the run-up to the deficit expected in the second half.

Another factor contributing to the rise in prices, was the statement of the Indonesian government regarding the impossibility of easing the embargo on nickel, even after the July presidential election. As a result, the price of nickel stood at the level exceeding 18 thousand. USD per tonne, well above initial forecasts. The average value of the metal in January-June 2014 amounted to 16.523 thousand USD per ton -. The same figures were observed in the same period last year.

If the Indonesian ban and continue to operate on, the specialists of «Norilsk Nickel» confident in the future growth of the metal value. The company also expects to reduce production of crude ferronickel in China by at least 50 000 tonnes in the current year, and in 2015 this figure threatens to rise to the level of 150 000 tonnes. However, to some extent, the situation can be stabilized through the implementation of new projects in Madagascar, Oceania, Latin America and Indonesia, however, the successful development depends on technological possibilities. In this case there is no doubt that an increase in supply does not block the growing volumes of consumption, so that a significant deficit of nickel is expected in 2015.

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