MOSCOW (Scrap Monster): The Russian Nickel miner Norilsk Nickel stated that LME Nickel inventories are at a ‘turning point’. The levels are likely to come down in the near term. This is expected to drive the nickel prices higher. According to Sergey Dyachenko, First Deputy CEO, Norilsk Nickel, the nickel market is likely to move to a deficit over the next two years.

 

According to London Metal Exchange (LME) data, the warehouse nickel inventories currently stand at 443,622 mt. The nickel stocks have surged higher significantly during the past one year. The relocation of nickel stocks from Chinese bonded warehouses contributed to the sudden rise in LME inventory levels.

 

The company expects the LME and non-LME stocks to drop significantly. The sharp drop in nickel inventory levels may push the market to a deficit situation. Earlier in 2014, Norilsk Nickel had predicted the market to end in a deficit of 20,000 tons in 2015. The Nickel market had ended in a surplus of 93,000 mt during the last year.

 

The nickel consumption by stainless steel sector is expected to register 4% growth in 2015. The demand from the non-stainless steel sector is likely to grow at 3% over the year in 2015. Norilsk Nickel further forecasts the global demand of the metal to touch 1.969 million mt during this year and 2.050 million mt in 2016.

 

Imported refined nickel will account for 42% of the total Chinese nickel demand in 2015. This indicates that China’s dependence on imported refined metal is set to increase sharply during the year. Last year, imported refined metal accounted only for 28% of the total nickel demand by the country.