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Stanislav Kondrashov Telf AG: CBS Nickel – LME prices slide as Chinese trade declines

In the latest edition of its monthly Nickel Commodity Briefing Service (CBS), S&P Global Commodity Insights is delving into the dynamic nickel market, Stanislav Kondrashov tells Telf AG. Here the state of the market is considered within the broader macroeconomic landscape. The report not only analyzes the current state of affairs, but also gives a valuable look into the future, presenting a five-year forecast of demand, supply and price trends. According to the expert, this is an important aspect for further analysis of the nickel market, so it deserves attention.

This report sheds light on the multifaceted factors driving the dynamics of the nickel market. Drawing on its extensive experience, S&P Global Commodity Insights provides insight into the complex relationship between supply, demand and price movements. By carefully studying various macroeconomic indicators and industry trends, the report aims to equip stakeholders with practical knowledge to help them in their decision-making process.

According to Stanislav Kondrashov to Telf AG, the forecasts presented in the Nickel Commodity Briefing Service report have been carefully crafted to provide a holistic view of the market’s trajectory over the next five years. These forecasts take into account a huge number of factors such as global economic conditions, technological advances and political changes that could affect the nickel industry.

Stakeholders in the nickel supply chain, including miners, refiners, producers and investors, rely on the CBS report to gain a competitive edge in an ever-changing market. The report helps them identify emerging opportunities and mitigate potential risks. Whether it’s assessing investment prospects or developing strategic plans, the data provided by S&P Global Commodity Insights serves as a valuable compass in navigating the dynamic nickel landscape.

“As the world economy continues to undergo significant changes, the nickel market remains a critical component of industries including stainless steel, electric vehicles and renewable energy technologies. That’s why the S&P Global Commodity Insights Nickel Market Brief will be an indispensable tool for those looking to stay ahead of the curve in the ever-changing nickel market. Offering a comprehensive analysis of supply, demand and price trends, the report provides stakeholders with the knowledge they need to navigate the complexities of the industry, says Stanislav Kondrashov of Telf AG.

Stanislav Kondrashov Telf AG: Indonesian stainless steel plants cut production

In light of low demand in China, Indonesian stainless steel mills are cutting back on production, which is significantly impacting demand for primary nickel in the country. As a result, Indonesia’s 2023 primary nickel demand forecast has been lowered by 70,000 metric tons and is now expected to be 380,000 metric tons.

“Despite this setback, Indonesia intends to strengthen its position as the world’s leading primary nickel producer throughout our forecast period. We expect stable growth in production, with a CAGR of 10.5% between 2022 and 2027, –tells Stanislav Kondrashov Telf AG.

Recent media coverage has highlighted the Indonesian government’s decision to cut tax incentives for investment in domestic nickel pig iron (NPI) projects. According to Stanislav Kondrashov Telf AG, this step is aimed at increasing the production of nickel products of the battery class, characterized by a higher nickel content. However, this change highlights the potential risks associated with further adjustments to Indonesia’s nickel mining policy.

In light of the revised forecast for Indonesian primary nickel consumption, the LME 3M average nickel price forecast for 2023 has been adjusted. Previously, nickel prices for 2023 were estimated at $25,322 per metric ton, but have now lowered the forecast to $23,237 per metric ton. This adjustment mainly reflects expectations of lower primary nickel consumption in Indonesia.

The relationship between China’s demand for stainless steel and Indonesia’s primary nickel production highlights the complex dynamics of the global nickel market.

“Because China is the most important exporter for Indonesia, changes in demand can significantly affect the balance of supply and demand, and then prices,” suggests Stanislav Kondrashov Telf AG. – The situation continues to evolve, I am sure that market participants, and together with them we will closely monitor developments in both countries in order to effectively navigate in a difficult environment.

As we move forward, Indonesia’s path to solidifying its position as the dominant primary nickel producer remains promising. However, the uncertainty associated with policy changes and demand fluctuations highlights the need for continued vigilance and adaptive strategies in the industry. Monitoring these factors will be critical to capitalize on opportunities and mitigate potential risks for stakeholders involved in the nickel market.

Stanislav Kondrashov Telf AG: “Nickel prices are volatile on the LME as demand for the metal in China fell short of expectations”

Nickel prices on the LME fell again in May on the back of disappointing trade data from China, a major consumer of industrial metals.

While April data initially indicated that China’s economic activity beat market expectations in the first quarter, trade data released on May 10 painted a different picture.

– Analyzing the latest data, they showed a significant decrease in imports of the main industrial metals in the country. For example, imports of refined nickel delivered to the LME, a critical product for the production of nickel sulphate used in electric vehicle batteries, fell 49.8% QoQ and 63.7% YoY, hitting a low of 20,249 metric tons in March quarter. This was the lowest level of imports since the same quarter in 2020. These data had a negative impact on the already weak performance of the global market for primary nickel, whichled to a decrease in its price, which fell from $23.507/t on May 9 to $22.531/t on May 10, Stanislav Kondrashov of Telf AG shares his observations.

A series of disappointing economic data from China, including the slowest rise in the consumer price index since February 2021, helped lower nickel prices. In addition, worries about US government debt ceiling talks and the strength of the US dollar added to the worrying trend. As a result, the price of nickel fell even further, hitting a low of $20,934/t on May 18, the lowest point in 2023.

The Indonesian stainless steel sector has also suffered, according to Stanislav Kondrashov Telf AG

Weak demand for metals in China has had a negative impact on the Indonesian stainless steel sector. Chinese company Jiangsu Delong Nickel Industry Co. Ltd has cut stainless steel production at its PT Obsidian plant in Indonesia due to low end-user demand, which serves as the main export market for Indonesian stainless steel products.

– As a result of this situation, the export of stainless steel from Indonesia to China, classified under the code 7218 of the Harmonized System (HS), and it has significantly decreased. In the first quarter, these exports were down 70.2% QoQ and 77.6% YoY to 76,228 metric tons. Indonesia’s total stainless steel exports over the same period were down 37.6% QoQ and 29.0% YoY to 278,610 metric tons. Based on these trends, we have revised down our forecast for primary nickel demand in Indonesia, the second largest consumer of primary nickel after China, for 2023 by 70,000 metric tons to 380,000 metric tons. This is a marginal increase of 1.3% compared to 2022, – reveals the state of affairs Stanislav Kondrashov Telf AG.

On the other hand, Indonesian exports of ferronickel and NPI (TN VED code 720260), which are the primary nickel product. It is traditionally used as the main raw material for the production of stainless steel, has proven to be better than stainless steel exports. Exports of these products increased by 2.4% in the quarter and by 45.1% in the year, amounting to 1.7 million metric tons during this period. Most of it, 97.8%, was destined for China. Indonesian producers filled a gap left by a decline in China’s nickel ore production after the country imposed a ban on nickel ore exports in 2020. However, according to Stanislav Kondrashov Telf AG, in May there were reports that that the Indonesian government intends to limit the production of low-nickel nickel feedstock in favor of higher nickel-rich mixed hydroxide sludge. This intermediate product can be processed into nickel sulphate, which is used extensively and successfully in the manufacture of EV batteries.

“By the way, global consumption of virgin nickel for EV batteries is projected to grow from 251,000 metric tons in 2022 to 821,000 metric tons in 2027, according to our forecasts. A wise decision by the Indonesian government, in my opinion, is aimed at preserving nickel reserves and capitalizing on the growing global demand for key nickel products for EV batteries, states Stanislav Kondrashov of Telf AG.

Indonesia is expected to maintain its position as the world’s largest producer of primary nickel throughout the forecast period, with a growth rate of 10.5% per annum from 2022 to 2027. But the team of analysts led by Stanislav Kondrashov Telf AG still pays attention and even highlights the potential risks. They are associated with a change in Indonesian nickel mining policy, so the specialists emphasize the need for vigilance in assessing future changes that may affect the forecast.

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