SHANGHAI, May 31 (SMM) – At the opening of the SMM 2023 Indonesia International Nickel and Cobalt Industry Chain Conference on May 30, SMM is honoured to have invited Luhut, Minister of the Coordinating Ministry of Maritime Affairs and Investment Republic Indonesia and several other important Indonesian government officials.
At the meeting, Ricardo Ferreira, director of market research and statistics of the International Nickel Study Group (INSG), has shared his views on the global nickel market outlook.
Ferreira said that due to the current economic environment, there is uncertainty in the commodity market. Nickel production will continue to grow strongly in 2023, but at a slower rate than in 2022. Nickel consumption will grow at a similar rate to 2022 in 2023 after being affected by the economic slowdown in 2022. After a deficit in 2021 and a surplus in 2022, the global nickel market is expected to be in surplus again in 2023.
Preliminary data show that there was a surplus of 51,000 mt in the primary nickel market in the first quarter of 2023, the fourth consecutive quarter of surplus. This suggests a substantial surplus in 2023.
Global nickel mine production rose 10.9% and 18.6% respectively in 2021 and 2022, and is expected to grow 16.1% in 2023.
Indonesia is the world's largest nickel mining country and could account for 55% of global production by 2023 (49% in 2022). China-backed nickel pig iron (NPI) production and the HPAL projects are the main drivers for the increase in Indonesian output.
Preliminary data show that global nickel mine production increased 20% year-on-year in the first quarter of 2023, with Indonesia increasing by 41%.
Global primary nickel production increased 5.1% and 17.3% respectively in 2021 and 2022, and is expected to grow 10.2% in 2023. Since 2021, Indonesia has been the world's largest producer, and will account for 41% of the world's share in 2023. China is now in second place. Most of the growth occurs in Asia, whereas European and US production is expected to decrease in 2023.
Preliminary data show that global primary nickel production increased 11% year-on-year in the first quarter of 2023, with Indonesian production growing 19%.
The construction of new projects in Indonesia is being stepped up and new production lines have been added. In China, the availability of ore is a key issue. Since 2020, NPI production in China has been lower than that in Indonesia.
Indonesia has banned the export of nickel ore from January 2020, processing only part of its nickel production domestically (NPI for stainless steel production) while exporting the rest (NPI, MHP and matte). New NPI, MHP and matte (converted from NPI) projects will continue to increase or will be put into operation in the short term.
Global primary nickel demand rose 16.2% in 2021 and grew 6.3% in 2022, and is expected to climb 6.1% in 2023.
China is the world's largest nickel consumer, while Indonesia ranks second, with the two accounting for 61% and 12% of the global market respectively in 2023. In 2023, almost all growth will take place in Asia.
Preliminary data show that global primary nickel use increased by 0.4% year-on-year in the first quarter of 2023, with a growth of 8.9% in China.
Despite softening demand over the past few years, the stainless steel industry remains the most important market for nickel, and global nickel use in this industry has been increasing. The production of nickel-containing batteries for electric vehicles is increasing, both in terms of volume and market share.
Global light vehicle sales fell by 1% in 2022 (to about 80 million units), but are likely to recover to about 82 million units in 2023. Global sales of electric vehicles (EVs) were 6.46 million units (+93.6%) in 2021 and 10.31 million units (+59.6%) in 2022, and are forecast to grow 32% in 2023. The penetration rate of EV (BEV+PHEV) has been increasing continuously. By 2023, the penetration rates of BEVs and PHEVs may reach nearly 12% and close to 5%, respectively.
Summary
The global economy has gradually recovered from the impact of the COVID-19 pandemic and is starting to overcome some of the impact of the ongoing conflict in Ukraine. Chinese economy is bouncing back after being hit by the pandemic. Energy constraints are receding. Most global central banks have been raising interest rates to keep inflation in check, although this has also had some side effects on the financial sector. Overall, the forecast for global growth in 2023 is lower than that for 2022. It is expected that the global primary nickel market will continue to be in surplus in 2023. One of the hot topics is the demand for nickel used in the production of electric/new energy vehicle batteries is expected to grow significantly in the next few years.
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