SHANGHAI, Jun 14 (SMM) – A considerable increase in nickel pig iron (NPI) production is expected to turn the global pure nickel metal market from a deficit in 2018 to a tight balance in 2019, Liu Yuqiao, senior nickel analyst from SMM.
This is likely to lower nickel prices to an annual average of $12,000/mt for 2019. LME nickel is likely to hover at $10,000-15,000/mt throughout this year.
The nickel deficit, however, is expected to widen after 2021, when the annual average for LME nickel is expected to climb to $15,000/mt, Liu told delegates at the Nonferrous and Ferrous Metals Summit jointly held by SMM and Chinese financial research firm Horizon Insights in Shanghai on Friday June 14.
Global NPI production is expected to continue to grow in 2019, with Indonesia as another major production hub. NPI output from Indonesia is estimated to expand 105,000 mt this year, bolstered by projects with Chinese investment from Delong, Tsingshan and Jinchuan.
Shandong Xinhai would drive domestic NPI production growth in 2019. New NPI capacity is expected to move China’s primary nickel market, including refined nickel, nickel pig iron, ferronickel and nickel salts, to a supply surplus in 2019.
As new capacity ramped up faster than expected, primary nickel supply in China is estimated to exceed demand by 28,000 mt this year, compared with a surplus of 23,800 mt that SMM expected at the end of April.