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Nickel March 01, 2018 03:30:03 PM

Decent Nickel Deficit to Trigger Modest Price Rise in 2018

Paul Ploumis
ScrapMonster Author
The nickel prices averaged at $10,414 per tonne in 2017, surging higher by 8.4% from the year prior to that. On a quarterly basis, the prices averaged at $11,665 per tonne in Q4.

Decent Nickel Deficit to Trigger Modest Price Rise in 2018

SEATTLE (Scrap Monster): The 2018 Global Base Metals Outlook Report published by Thomson Reuters GFMS predicts another sizable deficit for world nickel market. However, the deficit will not be adequately sufficient to trigger a substantial increase in prices. GFMS foresees modest price rise in 2018.

The nickel prices averaged at $10,414 per tonne in 2017, surging higher by 8.4% from the year prior to that. On a quarterly basis, the prices averaged at $11,665 per tonne in Q4. Meantime, the spot prices in January this year touched $13,200 per tonne, recording the highest level since mid-2015. Currently, nickel looks to be very well positioned for a strong upwards movement, GFMS analysts noted.

Vale had lowered the earlier nickel production guidance for 2018 by 15% in December 2017, mainly on account of maintenance shutdown at its Stobie and Birchtree mines. Following resumption of exports, Indonesian mine output has exceeded the production by Philippines during the initial eleven-month period last year, in accordance with INSG data. The global refined nickel output which registered 4% jump in 2017 is likely to fall slightly short of that pace in 2018.

ALSO READ: World Nickel Market Deficit Dropped in 2017

The Chinese nickel pig iron (NPI) output registered 10% growth in 2017. GFMS rules out the chances of rapid growth in Indonesian NPI industry at the expense of China’s NPI sector during the current year. The total Indonesian production is expected to surge higher by nearly one-third in 2018 to around 270,000 tonnes. The production had almost doubled in 2017.

The reasonably robust global nickel demand will result in another year of sizable deficit. However, this will not be sufficient to significantly reduce nickel inventories during this year, or even into 2019. GFMS forecasts nickel prices to rise by around 16% this year, which is considered as a modest, but not stellar performance. It also states that the market will be subject to volatility based on its reactions to industry developments.

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