Nickel
Escalating Trade Disputes Between US and Trading Partners
July 2018
Finished nickel demand is forecast to continue growing strongly to be up 7.8% to 2.33Mt in 2018, following a 6.3% increase in 2017. Demand is forecast to lift another 4.2% in 2019. A supply deficit of 80kt of finished nickel is forecast in 2018, compared to a 140kt deficit in 2017.

The month-average nickel price increased 5.1% in June 2018 to US$15,106/t (US$6.85/lb). The nickel price rose in early June to a high of US$15,688/t (US$7.12/lb) before easing through the rest of the month to finish at US$14,823/t (US$6.72/lb). The easing in nickel and other base metal prices through most of June was due to concern about the impact of trade disputes between the US and its trading partners, particularly China, on global growth. Exchange nickel stocks continued to decline, down by 22kt to 295kt at the end of June. LME stocks of 273kt were at their lowest end of month level since February 2014.

Tsingshan, the world’s largest stainless steel producer, brought the third of three 1.0Mtpa stainless steel production phases within the Indonesian Morowali Industrial Park on stream in June. The first and second 1.0Mtpa phases were launched in June 2016 and September 2017, respectively. Tsingshan plans to be operating the Indonesian operations at full capacity of 3.0Mtpa from 2019.

Vale is proceeding with underground development at its Voisey’s Bay nickel mine in Canada after completing cobalt streaming agreements with Wheaton Precious Metals and Cobalt 27 Capital. Upfront payments totalling US$690m have been received. These payments represent 40% of the US$1.7bn expansion capex. Vale intends producing 38ktpa of nickel in concentrate from the Voisey’s Bay open pit in 2018 to 2020, ramping up to 45ktpa of nickel from 2024 after transitioning to underground mining. The underground mine expansion extends mine life from 2023 to 2034.