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Global growth demand for strong nickel prices remain buoyant

Views:6     Author:Site Editor     Publish Time: 2018-05-04      Origin:Site

Recalling the April market, the Sino-US trade dispute caused sharp fluctuations in commodity markets. The direct reason for the rapid rise in the nickel price is that Rusal was under sanctions, and the market was worried about Russia and nickel. The fuse is April 18 night LME announced the cancellation of Norilsk Nickel two delivery brand announcement, the night of Lun-ni 11.5%, the biggest one-day gain in 2009 years.

Then the market confirmed that the brand cancellation for Russian nickel in October 2017, the initiative, and sanctions, nickel prices immediately drop. With regard to the cancellation of two delivery brands, it is true that the Norilsk company (MMC NORILSK Nickel), in connection with the Norilsk area of the polar branch, has shut down two old smelters, and on October 17, 2017 filed a cancellation of their subordinates ' NORILSK COMBINE H-1 and Norilsk COMBINE h-1y two brands, the final delivery date on April 17, 2018. After a 6-month bulletin, the two delivery brands were cancelled on April 17, 2018.

As to whether the company's smelting capacity has begun to decline, according to Nornickel Annual report, the company 2017 has achieved the Polar Division Talnakh concentrator Equipment upgrades and Nadezhda furnace expansion, so the company's overall smelting capacity will not be affected. The core metals produced by Russia's nickel ore smelting in 2017 increased by 7%-15% year-on-year. Up to now, Norilsk Company in the LME registered delivery brand has 4, respectively, is the branch of Cora (Kola Division) Severonickel COMBINE H-1 and Severonickel COMBINE H-12 brands,

And the Finnish Harjavalta smelter Norilsk Nickel Harjavalta cathodes and Norilsk Nickel Harjavalta two brands. Message misreading caused nickel price rapid decline trend, showing the nickel price still has a huge upward kinetic energy. After the market carnival must be attributed to rationality, the supply and demand relationship is the core driving force to determine price trends.

The 2016-2017 is the global nickel price stops to rebound the important node, therefore, we again to 2017 nickel city supply and demand pattern carries on the review and the carding. On demand, global nickel consumption grew nearly 8% per cent year-on-year in 2017. Although China's demand for stainless steel declined from 10% to 3% in 2017, its nickel consumption in other parts of Asia grew by more than 27% per cent year-on-year. Consumer demand in the Americas grew 7% per cent year-on-year, driven by the largest steel mills in the United States. The demand for stainless steel in Europe is virtually unchanged. Nickel demand in the battery industry has increased by more than 100,000 tonnes in the context of a 40%-50% increase in global production of pure Battery electric vehicles (BEV) and plug-in hybrid vehicles (PHEV).

However, demand for the nickel battery industry remains a small fraction of global demand, accounting for less than 5%. In terms of supply, the global supply of raw nickel grew by 5% per cent year-on-year in 2017, with Asia growing 14% per cent year-on-year, with incremental contributions from NPI and feni in China and Indonesia. 2017, the Indonesian NP production doubled to more than 170,000 tons, while the resumption of exports of raw ore up to 4 million tons (about 40,000 tons of nickel ore), mainly to China. As a result of policy changes, the Philippine ore supply is also recovering. At the same time, nickel production decreased by about 60,000 tonnes in 2017, mainly due to the continued weakness of nickel prices in recent years, so that the global investment in nickel sulfide mining enthusiasm declined.

According to Jinchuan data, the next three years nickel market new smelting capacity mainly nickel-iron project, metal nickel almost no new project increment. In the 2018, global economic growth supported nickel demand. Global demand for primary nickel is expected to increase by 6% per cent year-on-year, thanks to continued growth in stainless steel capacity in China and Indonesia. Nickel alloys, boosted by the expansion of aerospace, oil and gas industries, will again show strong demand.

However, the continued increase in production capacity in the Indonesian NPI and the continued increase in the country's mineral export quotas could lead to faster supply growth. In the long run, the new energy field has become a bright prospect for the global nickel consumption drive. 2017 Global New Energy vehicle sales of 1.22 million vehicles, an increase of nearly 60%, of which China sold 770,000 vehicles, accounting for more than 63%.

It is expected that by 2020, global new energy vehicle sales are expected to reach 3.5 million vehicles, the demand for nickel will increase to 3 times times. Nickel market in the short term neutral, long-term bias. Although we expect strong demand growth in 2018, the increase in NPI production in Indonesia and the rebound in exports from Indonesia and the Philippines is expected to narrow the supply gap from 105,000 tonnes in 2017 to 15,000 tonnes. The battery industry, while promising, remains the driving factor for the relative edge of global nickel demand. In the medium and long term, the premium on nickel and iron for refined nickel will continue to widen as the supply and demand contradictions between the supply of refined nickel continue to tighten and the demand for a huge increase is increasing. The nickel price risk is the weather condition and the Philippine policy change. That could prevent the Philippines and Indonesia from shipping ore to China, and the Philippines could take regulatory action to readjust its policy on the mining industry.

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