LME Nickel Poised to Rise in 2018, SMM Predicts

SHANGHAI, Oct. 30 (SMM) – LME nickel price is expected to average at $11,000-11,500 per tonne in 2018, SMM nickel analyst predicts at China Nonferrous Metals Industry Annual Meeting 2017 & SMM Nonferrous Metals Price Forecast Release 2018.

Followings are major stories in nickel market at the meeting, organized by SMM, co-organized by SHFE and sponsored by JHC and Crystal Energy, in Shanghai on October 27.

Sulfide ore: Over the 10 years of price decline on LME nickel market, many sulfide ore mines shut down since 2015, and moreover, current price is not high enough for those mines to return online. Parts of sulfide ore resources will be used in producing nickel sulfate in 2018-2019. BHP’s phase one of a nickel sulfate project, with annual capacity of 100,000 tonnes or 20,000 tonnes in Ni content, will start trial run in the first half of 2018 and be officially commissioned in the first half of 2019. In the coming years, global sulfide ore consumption from nickel sulfate sector will be higher than the level in years past thanks to a rapid development of global new energy vehicle market. Before LME nickel price reaches the level high enough for closed sulfide ore mines to restart production, supply of sulfide ore will remain tight, and global nickel plate output will be also curbed. SMM learns that Jinchuan Group will cut 10,000 tonnes of nickel plate supply in 2018.

Laterite nickel ore: NPI production costs using laterite nickel ore are relatively lower. Based on SMM on-site survey in Indonesia, RKEF NPI production costs in Indonesia are low, and as of late September, cash costs at Indonesian RKEF NPI projects were $6,000-7,800 per tonne, and $7,500-9,500 per tonne for full costs. In the coming 3 years, Indonesian NPI output will keep growing, and the output is estimated to reach 166,000 tonnes (Ni content) in 2017, and 265,000 tonnes (Ni content) in 2018. Global NPI output is expected to hit 692,000 tonnes (Ni content) in 2018. New RKEF NPI projects in Indonesia are expected to be commissioned in 2019-2020. (For details, please see SMM China Nickel Industry Chain Report 2016-2020). SMM predicts that NPI price over refined nickel price will fall into big discounts in the coming 3 years.

Downstream demand: stainless steel market will remain major nickel consumer, and nickel demand from electroplating and alloy sectors is expected to be stable, and that from battery market will grow by 10% and above in the coming 3 years. According to SMM survey, China’s stainless steel output will be around 24.50 million tonnes this year, up 4%, and the output will reach 25.50 million tonnes in 2018, up 5%, and #400 stainless steel is estimated to grow at the fastest pace of about 8%. In 2018, many #400 stainless steel projects will be commissioned, including Taigang Stainless Steel’s 1-million mt project, and the output growth of #200 and #300 stainless steel will reach 5% and 4% in 2018. Indonesia’s #300 stainless steel output will surge by more than 300% in 2018 to reach 1.50 million tonnes. Hence, nickel demand from stainless steel market will keep growing.

New energy market: nickel sulfate demand will grow from ternary batteries, and in the coming 3 years, ternary precursor and materials will stage a rapid growth in China. Ningbo Rongbai Li-ion Battery Material’s 200,000-tonne ternary materials project in Hubei and Guizhou, and MCC Ramu’s high-Ni ternary precursor project in Hebei started construction in mid-late October this year.

SMM predicts that China’s nickel consumption from ternary batteries for new energy vehicle will grow from 5,000 tonnes in 2016 to about 30,000 tonnes in 2020. As some countries announce to set a deadline for automakers to end sales of fossil-fuel-powered vehicles, overseas nickel consumption from ternary batteries for new energy vehicle is expected to reach 100,000 tonnes in 2020.

Note: This article is just part of keynote speech during the conference. For more information on SMM exclusive data and survey, please subscribe to SMM China Nickel Industry Chain Report 2016-2020. Contact: Wang Cong; Tel: 021-51666828.

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