Strong demand and higher prices for nickel underpin growth in the sector but logistics continue to be a challenge. Read the full market analysis here
What happened
By early September, nickel prices at the London Metal Exchange were up more than 16% for the year to date due to the on-going recovery in global manufacturing output and expectations for healthy future nickel demand, particularly from the electric vehicle market.
Why it matters
LME three-month nickel futures were trading above US$ 19 800 per tonne in late August after having traded below US$ 17 000 per tonne earlier in the year. Meanwhile, nickel stocks in LME warehouses have dropped by more than 70 000 tonnes since April to below 190 000 tonnes in early September. However, stainless steel recyclers continue to grapple with a range of obstacles including transportation bottlenecks and other supply chain disruptions stemming from last year’s Covid-induced recession, rising Delta variant infection rates and increasingly severe weather events.
The recent gains in primary nickel prices, supported by constrained supply and booming global demand, have helped to propel stainless steel and stainless scrap prices sharply higher this year. According to estimates from the International Nickel Study Group, global demand for nickel exceeded supply by 86 700 metric tonnes in the first half of 2021, as compared to a 74 200 tonne surplus in the first half of 2020.
Amid declining nickel stocks in both London Metal Exchange and Shanghai Futures Exchange warehouses during July and August, industry analysts continue to point to tight supply and demand fundamentals as being supportive features. Analysts at Macquarie Research are projecting global nickel consumption will increase 17% in 2021 to 2.8 million tonnes, an increase of 400 000 tonnes as compared to 2020 when Covid restrictions significantly weighed on consumption growth.
This news brief is based on reporting published by Recycling International on 2021-09-28. The original report is linked below.
Recycling International
https://recyclinginternational.com/business/rising-demand-despite-supply-chain-disruptions/46354/This independent news brief is based on the public source identified above. It is an original summary or translation, not a reproduction of the source article. Rights in source text, research, trademarks and images remain with their respective owners; images are used under the licence or permission identified in the credit. Rights holders may contact rights@goodproductasia.com with evidence of ownership. Verified concerns will be corrected, replaced or removed promptly. This report is not investment, legal, medical or purchasing advice.
