This year, there will probably be a surplus of nickel due to higher production than demand

The International Nickel Study Group said the world’s primary nickel output will outpace demand in 2022 and 2023, resulting in surpluses of 1.44 lakh tonnes this year and 1.71 lakh tonnes the following year. The International Nickel Study Group (INSG) has predicted that production will be 3.036 million tonnes (mt) this year and will likely climb to 3.387 mt in 2023. According to a statement from the intergovernmental body established in 1990, no attempt has been made to account for potential production disruptions in the INSG projection.

According to the organization, 2.775 mt of primary nickel will be used worldwide in 2021. It anticipates that this year’s usage will rise to 2.892 mt and 3.216 mt in the following years. The INSG, which consists of producer, consumer, and trade nations, stated that the implicit market balances would result in a deficit of 163 kt (1.63 lakh tonnes) in 2021, surpluses of 144 kt (1.4 lakh tonnes) in 2022, and a surplus of 171 kt (1.71 lakh tonnes) in 2023. Government and industry participants had a lengthy discussion about the estimation before it was made public.

“The INSG forecasts the global nickel market to shift to a supply surplus this year and to continue to remain in surplus next year due to negative growth expectations in the stainless­steel sector,” said ING Think, a division of the Dutch multinational financial services firm ING that conducts economic and financial analysis. Nickel is currently trading for $22,201, up 12.60 percent from last year. This price is far lower than the $100,000 per tonne it reached on the London Metal Exchange on March 8 of this year when a dealer from Hong Kong got caught going short. The nickel trade was put on hold for a few days before starting up again.

The metal rose shortly after the Ukraine conflict started since Russia accounts for 7.2% of the world supply before trade on the LME was suspended. According to the research firm Fitch Solutions Country Risk and Industry Research, nickel prices will be $22,500 in 2022 and $23,200 in 2023. It stated that for 2022, the organization anticipates a decline in the stainless steel industry and an increase in the use of nickel in electric car batteries (EV). Both sectors are expected to increase output in 2023. The production of stainless steel melt shops fell by 3.8 percent year over year to 14.5 mt, according to data from the international stainless association for the first three months of 2022.

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