Agoracom Blog

Tartisan #Nickel $ – Nickel prices seen driven by Indonesia export ban, auto industry demand $ $ $ $ $

Posted by AGORACOM-JC at 3:33 PM on Monday, November 25th, 2019

SPONSOR: Tartisan Nickel (TN:CSE)  Kenbridge Property has a measured and indicated resource of 7.14 million tonnes at 0.62% nickel, 0.33% copper. Tartisan also has interests in Peru, including a 20 percent equity stake in Eloro Resources and 2 percent NSR in their La Victoria property. Click her for more information

Tc logo in black

Nickel prices seen driven by Indonesia export ban, auto industry demand — Fitch Solutions

  • NICKEL prices are expected to gradually increase between 2020 and 2022 due to tight supply as a result of the export ban imposed by Indonesia, the mineral’s top producer, and the growing demand from the automotive industry, Fitch Solutions Macro Research said.
  • “While prices could still head lower in the coming weeks, we believe that they will rebound from spot levels as we move into 2020 and remain elevated throughout next year, buoyed by a tight fundamental picture,” Fitch Solutions said in its Commodity Price Forecast published on Nov. 22.

In 2020, it projects average nickel prices of $15,000 per ton, upgrading a previous estimate of $14,500. This is expected to increase to $15,500 in 2021 and 2022, then easing to $15,250 in 2023.

Fitch noted that the increase in price will be influenced by Indonesia’s nickel export ban starting January.

“In the longer term, we believe that prices will continue heading higher up until 2022 as the market will remain in deficit or balanced,” it said, and added that the ban could also limit refining activity in China next year. Chinese refining output is now expected to grow an average of 2.5% year-on-year, down from 3% projected for 2019.

However, supply concerns due to the ban have started to dissolve due to a realization that the Philippines could fill part of the gap as suspended mines resume their operations.

The United States Geological Survey noted in a report published February that Indonesia produced 560,000 tons of nickel last year, making it the top producer, followed by the Philippines with 340,000 tons.

The Philippine Mines and Geosciences Bureau (MGB) said that in the first half of the year, nickel ore production increased 3% to 11.306 million dry metric tons (DMT).

Nickel prices will also be influenced by demand from the automotive industry, a major user of stainless steel, which is the main application for nickel. Automotive demand will come into greater prominence amid an expected slowdown in the Chinese construction industry.

“Vehicle production will continue to record positive average annual growth of 1.0% over 2020-2028, lending some support to nickel demand. Other major nickel-consuming markets such as South Korea and India will also provide an upside to demand due to strong average vehicle production growth of 9.1% and 11.4%, respectively, over the next 10 years,” Fitch Solutions said.

The booming electric vehicle market will also drive demand for nickel, with most of the demand coming from China for the production of lithium-ion batteries. China is expected to expand the minimum range of vehicles eligible for subsidies to 150 kilometers (km) from 100 km. This will increase demand for nickel since longer-range electric vehicles need higher nickel content in their batteries.

“We forecast China to witness average EV sales growth of 10.9% year-on-year over 2019-2028, which will drive global electric vehicle sales growth and lead to an additional nickel demand during the period,” Fitch Solutions said. — Vincent Mariel P. Galang


Tags: , , , , , ,

Comments are closed.