Nickel
Strong demand growth expected to continue
April 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.

Continued escalation of the trade dispute between China and the US in the form of import tariffs is a downside risk to prices across the base metals complex.

The month-average nickel price eased 0.9% in March to US$13,322/t (US$6.04/lb). Markets in general were impacted by uncertainty and fear of an escalating trade dispute between the US and China as the US announced, then imposed, import tariffs on steel and aluminium. Exchange nickel stocks continued to decline, down a further 20kt to 360kt by the end of the month. The March Quarter average price came in at a three-year high of US$13,392/t (US$6.07/lb).

Chinese stainless steel production decreased due to the Spring Festival in February to an estimated 1.9Mt from 2.3Mt each in December 2017 and January 2018. Stainless steel output in China has started 2018 stronger than in 2017. In January and February 2018, production of 4.2Mt was up 4.8% year on year.

The outlook for mined nickel production in the Philippines remains uncertain as the country’s Mining Industry Coordinating Council has pushed completing a review of 26 mines ordered shut or suspended for environmental reasons in 2017. It appears the review may not be complete until the end of August 2018. Mines have remained operational after appealing the orders so 2017 national nickel output was little affected. Mined nickel production in the Philippines was an estimated 321kt in 2017 compared to 335kt in 2016.