INSG: Refined Nickel market deficit widened further in April

By Carolina Curiel (ScrapMonster Author)

EDGWARE (Scrap Monster): The global refined nickel market deficit widened to 10,100 tonnes in April this year, in comparison with the previous month, in accordance with the latest statistics released by the International nickel Study Group (INSG). The nickel deficit had totaled 7,600 tonnes during March 2016. Month-on-month, the refined nickel surplus has surged higher by nearly 33%. According to INSG, the global primary nickel production totaled 164,300 tonnes in April, whereas the consumption totaled 174,400 tonnes.

The cumulative nickel market deficit during the initial four-month period of the year totaled 7,100 tonnes. This is when compared with the surplus of 19,900 tonnes during the corresponding four-month period in 2015. The demand during this period was up by 3.4%, whereas production recorded marginal decline of nearly 1%. The latest available stocks data indicate that producers’ stock dropped from 88,300 tonnes in January to 85,600 tonnes in February this year. Also, INSG forecasts that global nickel output is likely to drop from 1.983 million tonnes last year to 1.913 million tonnes in 2016.

Quarterly data

Global nickel market ended in small deficit of 8,400 tonnes in January-March 2016 with apparent demand exceeding production, in accordance with the World Bureau of Metal Statistics (WBMS). The statistics indicate that that reported stockpiles maintained by LME were 1.4 kt lower at the end of March this year from the closing levels of 2015.

World Nickel mine production was 517.3 kt in January-March 2016, lower by 14 kt when compared with the corresponding period during previous year. Refined Nickel production in Jan-Mar ’16 was 409.8 kt. The total smelter/refinery production of Nickel was 136.6 kt in March 2016. Japan's smelter/refinery production during the initial three-month period of the year witnessed a jump of 5.0 kt compared to 2015.

Refined Nickel consumption during Jan-Mar ’16 surged higher by 67 kt when matched with the previous year. Nickel smelter consumption was 146.6 kt in March this year. The apparent demand of Nickel from Japan was marginally higher by 2.2 kt during January to March this year when matched with the previous year. The refined Nickel demand in Jan-Mar ’16 totaled 418.2 kt.

Nickel price

Meantime, most base metals including Nickel settled lower during LME pre-market trading. The prices of nickel have dropped by $50 to $8,870. Nickel inventories on LME too have dropped sharply by 930 tonnes to 393,272 tonnes.

Nickel Forecast

Nickel, after tumbling 42% in 2015, fell another 3.7% during the first quarter of 2016. The prices hit a low of $7,580 per tonne in February. Although it has witnessed a late rally in February, the fundamentals continue to remain weak for the metal. During Q2, benefits on account of the planned production cuts and rise in demand are likely to be offset by exceedingly high inventory levels. The metal will continue to remain range-bound between $8,000 and $9,500 per tonne during Q2. Moderate recovery in global stainless steel production is likely to reduce downward pressure on nickel, according to the ‘Sucden Financial Metals Report-April 2016’.