Global Palladium Fund Points to High-Grade Global Nickel Deficit in 2022

SEATTLE (Scrap Monster): Global Palladium Fund anticipates global nickel surplus of 59kt in 2022. The surplus will be mainly concentrated in low-grade nickel pig iron (NPI) and will depend heavily on an expected increase in supply from Indonesian facilities. The report cites uncertainty in supplies from Indonesia.

According to Global Palladium Fund, the launch of significantly expanded NPI production capacity in Indonesia was hit by the impact of Covid-19 pandemic. This is likely to result in a nickel market deficit of around 150kt during the current year. If this increased capacity comes online, it would contribute to a supply growth of approximately 20% year-on-year.

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The supply outlook for higher-grade nickel looks less certain. A potential surplus market would be favourable for stainless steel manufacturers as well as manufacturers of electric vehicle batteries.

All depends on whether Indonesia will be able to ramp up its capacity to meet strong nickel demand. However, many market participants expressed deep concerns on being overly reliant on one country, said Alex Stoyanov, CEO, Global Palladium Fund.

The situation for high-grade nickel looks more balanced, with fewer chances for near-term supply increases. On the contrary, low-carbon nickel will witness huge imbalance, resulting from boosted demand and constrained supply.