Nickel price session on September 10 on the London exchange, the UK at one point touched 20,705 USD/ton, the highest since May 2014.
Fitch Solutions predicts nickel prices will fall later this year and in the first quarter of next year.
Nickel prices on September 10 on the London exchange, England, at times touched $ 20,705 / ton, the highest since May 2014. However, this price level did not last long. In recent sessions, the price has dropped below 20,000 USD/ton.
Experts say the recent drop in nickel prices stemming from the Evergrande crisis has raised concerns about a drop in demand from China’s property sector. Nickel is an important ingredient in stainless steel, and most stainless steel factories are located in China, accounting for about two-thirds of global nickel. Meanwhile, Evergrande accounts for 10% of China’s total nickel consumption, 8% of total global consumption (200,000 tons/year).
Facing market developments, rating agency Fitch Solutions Country Risk and Industry Research (FSCRIR) forecasts that the average price of nickel in the last three months of the year will be only $1,672/ton, much lower than the annual average in Vietnam. 17,500 USD/ton. Even the low price of nickel will remain until the first quarter of 2022 when supply tension eases.
Nickel price movements. Source: Trading Economics
Nickel supply will be more abundant
CRU data company from the UK said that Covid-19 has had a big impact on the nickel production industry, especially in Indonesia – the country with the largest nickel production in the world in 2020. However, the negative effects of The pandemic has been gradually overcome and production will improve in the fourth quarter of this year and the first quarter of next year.
Fitch Solutions also shares the same view and thinks that refined nickel production will improve in the end of this year and the first quarter of 2022. “In Indonesia, the gradual lifting of restrictions due to Covid-19 by mid-2021 will reduce obstacles to refined nickel production and build more production plants.”
A representative of Corporate Sector Ratings also assessed that nickel production would recover to pre-Covid-19 levels.
The International Nickel Study Group (INSG) predicts nickel production this year to be 2.7 million tonnes, compared with 2.5 million tonnes in 2020.
Indonesia is the world’s largest nickel producer with 760,000 tons in 2020. The Philippines ranks second with 320,000 tons. Russia is in third place with 280,000 tonnes, according to data from Statista.
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