Nornickel continues to deliver metals according to its contract obligations

Nornickel, the world’s largest producer of palladium and high-grade nickel and a major producer of platinum and copper said in its ninth review of the nickel and platinum group metals (PGM) markets that it confirms its production guidance for 2022 and continues to deliver metals according to its contract obligations despite logistic obstacles associated with the limited availability of international flights.
Nornickel expects that global palladium demand to rise by 3% to 10.3 million ounces in 2022 mainly on the back of a partial automotive sector recovery from the low base of 2021. Metal supply will grow slightly as well, predominantly due to recovering after the 2021 accidents production at Nornickel’s assets. As a result, it is expected that palladium market will be close to balance this year with the deficit of 0.1 million ounces.
The review maintains that the 2022 platinum market surplus is expected at around 0.9 million ounces. In 2023, the surplus is seen shrinking to 0.6 million ounces mostly due to the automotive sector recovery.
According to the company, the demand for platinum from the automakers is expected to stagnate this year as the global auto sector partial recovery will be offset by lower consumption in China, where metal use in car manufacturing will decline in 2022 on the back of PGM loading optimisation caused by thrifting after strong loadings growth in 2021 driven by the introduction of the China VI heavy-duty regulation. Moreover, the decrease in diesel-powered share of new passenger cars in Europe is creating additional pressure on platinum demand.
“South African supply is expected to decrease this year as most of accumulated work-in-progress materials were already processed during 2021,” the review said. “There is also a significant risk regarding primary supply in this region, as all the major PGM producers are to enter new wage negotiations with their local unions, which carries the risk of weeks-long strikes.”
The company expects the 2022 primary nickel demand growth to slow down to +11% at 3.17 million tonnes as opposed to the 2021 increase of 17%, reflecting the current price environment, high inflation across major economies and uncertain macroeconomic outlook. The 2022 nickel market is currently expected to be in a mild surplus of around 40,000 tonnes and mostly in low-grade nickel, leaving Nornickel’s previous forecast virtually unchanged.