Norilsk Nickel published a new review of the metals market, in which it assessed supply and demand prospects for its products.
The company expects that in 2024, the excess supply in the nickel market will be about 100,000 tons, versus more than 190,000 tons in the previous forecast. Meanwhile, the forecast for the palladium supply deficit this year was significantly increased from 400,000 ounces to 900,000 ounces. In addition, the company expects the refined copper market deficit to be 0.2 million tons this year, against the previous forecast of 0.1 million tons, and the market deficit will persist next year.
“Since the volume of nickel production, which has been suspended or is at risk of closure, amounts to almost 400,000 tons in nickel equivalent, we believe that the current production [downside] risk is still underestimated,” Norilsk Nickel analysts note.
The nickel supply glut will be driven by the startup of Indonesian nickel pig iron projects, albeit at a slower pace than expected, as well as increased production from new plants in China. This will be partially offset by strong growth in nickel consumption in the stainless steel and alloy industries, as well as the electric vehicle battery sector.
Low platinum group metals (PGM) prices are pressuring the recycling sector, while the market is seeing increased adoption of long-range electric vehicles that use an internal combustion engine to generate electricity. This leads both to the replacement of a number of PGMs with palladium in the automotive industry, and to a potential increase in palladium prices in the medium term, Norilsk Nickel notes.
The platinum market, according to company analysts, will be balanced in the medium term, although production may decline due to a fall in primary supply in South Africa caused by cost optimization measures.
Theodor Lisovoy, Editor in Chief, Rough&Polished
