Global nickel production growth to slow in 2020

Published: Oct 24, 2019 17:08

Save

Primary nickel production is estimated to increase 5% to 2.58 million mt in Ni content next year

CHANGSHA, Oct 24 (SMM) – Global nickel production growth is expected to slow down in 2020, as nickel pig iron production in China will be affected by raw material supply shortages after Indonesia bans exports of raw nickel ore from January 2020.

"Worldwide production of primary nickel is estimated to grow 5% to 2.58 million mt in nickel content next year, decelerating from an increase of 11% in 2019," said SMM nickel analyst Gao Yin at the SMM Lithium Battery Summit in Changsha, Hunan province.

Supply from China and Indonesia accounts for nearly 50% of the total volume globally, and NPI will be the major driver of nickel production growth.

In early September, Indonesia confirmed that it will accelerate the ban on raw nickel ore exports. This sparked fears of supply shortfalls and bolstered ore prices, which may lead to the production curtailments of high-cost NPI capacity.

In 2020, demand of Ni content of laterite nickel ore from Chinese NPI producers is estimated to be around 630,000 mt, according to SMM calculations based on existing capacity in operation and operating rate in September.

This will far exceed an estimated supply of 433,000 mt in Ni content, which means that China NPI production will likely decline to 430,000 mt in Ni content next year, after soaring 29% to 590,000 mt in 2019 on high profits and an easing in environmental protection-driven restrictions.

The suspension of high-grade laterite nickel ore supply from Indonesia will also lower the Ni grade of NPI that are produced in China from the current 9.5-10% to below 8%.

NPI capacity spike in Indonesia, however, will help offset the supply reduction from China.

In face of slower production growth, nickel demand growth will maintain high speed as stainless steel production will expand following the commissioning of a slew of new projects in China and Indonesia. It is expected that a bigger nickel supply deficit may happen globally next year.

The pursuit of high-nickel batteries will also help boost demand for nickel, as the auto industry is embracing electrification.

Gao also expects nickel prices to rise to an annual average of $16,500/mt in 2020.

SMM Li Battery Summit nickel battery Indonesia export ban

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM's internal database model. They are for reference only and do not constitute decision-making recommendations.

For any inquiries or for more information, please contact: lemonzhao@smm.cn

For more information on how to access our research reports, please contact:service.en@smm.cn

Related News

6 hours ago

[SMM Stainless Steel Flash] India's Stainless Steel Bright Bar Export Prices Remain Firm W-o-W Despite Weak Demand

India's stainless steel bright bar export market remained broadly stable in the week ended September 8, with sentiment largely unchanged from recent weeks. Geopolitical tensions, elevated freight costs, and CBAM requirements continued to suppress overseas buying interest, while European market activity stayed subdued due to the ongoing summer holiday period, with enquiries expected to gradually resume next week. Indicative export offers held at US$2,370–2,390/t FOB India for 304 bright bars and US$4,300–4,350/t for 316, with BigMint assessments at US$2,370/t and US$4,320/t FOB Nhava Sheva respectively, largely stable WoW. In domestic longs, 304 black bars rose INR 2,000/t WoW to INR 200,000/t exw-Mumbai, while 316 black bars gained INR 5,000/t to INR 363,000/t. Domestic 304 scrap edged up INR 2,000/t WoW to INR 151,000/t DAP Delhi, with tight availability keeping replacement costs elevated and limiting scope for price corrections in the near term.

6 hours ago

[SMM Stainless Steel Flash] EEC Extends Anti-Dumping Duty on Stainless Welded Pipes from China until September 2031

The board of the Eurasian Economic Commission (EEC) has extended the anti-dumping duty on welded pipes, tubes, and hollow profiles of corrosion-resistant (stainless) steel originating from China until September 7, 2031, based on the results of an investigation, according to a statement from the EEC's trade division.

6 hours ago

[SMM Stainless Steel Flash] India's SMEL Sees Stainless Steel Sales Rise 16.44% YoY in August 2026

According to a SMEL's company statement released on September 9, they achieved stainless steel sales of 10,920 mt in August 2026, up 16.44% YoY, with average stainless steel realizations rising 2.21% MoM compared to July 2026. In other segments, carbon steel flat product sales reached 29,262 mt (+114% YoY), specialty alloy sales came in at 19,002 mt (+2,797% YoY), while carbon steel long product sales declined 2.76% YoY to 142,897 mt.

6 hours ago