[quarterly report] Eramet:2020 annual Q1 nickel mine output increased by 5 per cent year-on-year to 918 kilotons of wet tons

SMM4, March 30: Eramet recently released its results for the first quarter of 2020, with sales of 774 million euros in the first quarter of 2020, down 11 percent from the first quarter of 2019, mainly due to the sharp decline in manganese ore and Nife prices. The mining and metals sector's new operating records for the first quarter show that 918 kwmt of nickel ore was produced and 331 kwmt, of nickel mine exports were sold out in the first quarter of 2020.

Sales situation

Output situation

Sales in the nickel business fell 8 per cent to 151 million euros in the first quarter of 2020. SLN sales fell 10 per cent to 132 million euros. The decline in ferronickel sales was only partially offset by strong growth in nickel ore exports and high ore prices, which reflected both lower sales and lower selling prices.

As a result of the downturn in the automotive industry and the epidemic crisis, global stainless steel production, the main end market for nickel, shrank significantly compared with the first quarter of 2019, and this change was observed in China (- 6.0 per cent) and the rest of the world (- 18.8 per cent), particularly in Indonesia (- 9.8 per cent).

Primary nickel production rose to 569 kt in the first quarter of 2020 compared with a year earlier, driven by continued growth in NPI production, driven by Indonesia's ban on January 1, 1. 1.

In New Caledonia, the implementation of SLN's new business model remained successful in the first quarter. Mining production achieved record first-quarter results, closing at 918kwmt, up 5 per cent. Although the loading port of a mining centre was affected by social unrest at the beginning of the year, the volume of low-grade exported minerals increased by 41 per cent to 331 kwmt.

Nickel and iron production at the Doniambo plant fell by 1 per cent to 12.1 kt, supply smelters, which are still affected by the ore grade delivered to the plant, which is too low. Sales of nickel and iron also fell (- 3 per cent) to 11.6 kt.

Following the generation of cash in the second half of 2019, the deterioration in the nickel market environment in the first quarter of 2020 led to further cash consumption by SLN, despite a decline in its cash costs. In addition, in addition to the 4 Mt ores approved in April 2019, SLN contacted local authorities in April to request additional permits for the export of 2 Mt low-grade nickel ores. The request is aimed at offsetting the economic shortfall in energy leverage and achieving the goal of reducing cash costs as part of the SLN rescue plan.

At the Sandwell plant in Normandy, production of nickel salts and high-purity nickel metals fell 17 per cent in the first quarter of 2019 to 1.5 kt, mainly due to lower-than-expected technology operations and a two-week shutdown at the end of March as a result of the health crisis. Sales remained stable at 1.6 kt.

The group's NPI plant, a joint venture between Weda Bay and Castle Peak in Indonesia, is expected to open in the first half of 2020 and the furnace is currently heating. Mining production met the targets set in the first quarter and increased ore stocks by about 1 Mt to start the operation of the plant.

The spread of the pandemic is now reflected in reduced demand and supply of nickel, while the scale of the reduction is in contrast. The activities of a number of ore and metal-producing countries have been adversely affected, including Canada, the Philippines, South Africa, Madagascar and even Colombia. Therefore, there is still a lot of uncertainty in the balance of supply and demand.