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Mar.29.2024 1USD=7.095RMB
  SteelHome >>Nonferrous Metals>>Market Info>>International Dynamics
 
Sherritt Reports Higher Nickel and Cobalt Production Results at Moa JV in Q2 2020

https://en.steelhome.com [SteelHome] 2020-08-04 11:18:56

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Nickel

Nickel market conditions improved throughout the second quarter of 2020 in concert with the restart of economic and manufacturing activities in China and Europe following the outbreak of the COVID-19 pandemic in the first quarter of the year.

Nickel prices on the London Metals Exchange (LME) started Q2 at US$5.12/lb and closed on June 30 at US$5.81/lb.

Although nickel prices showed signs of recovery, nickel inventory levels on the London Metals Exchange (LME) and the Shanghai Future Exchange (SHFE) remained relatively flat. Combined inventory levels at June 30 totaled approximately 262,000 tonnes, up from approximately 256,000 at April 1.

Nickel inventories on the LME and SHFE have not increased significantly despite the reduced production of stainless steel over the past several months largely because a number of nickel mines around the world have significantly reduced production or have gone into care and maintenance as a result of the spread of COVID-19.

In the near term, nickel prices are expected to be volatile given the ongoing economic uncertainty caused by the pandemic. As mining operations resume production activities, nickel inventory levels may rise given that supply could exceed demand as a number of industries that are large consumers of stainless steel, such as food and hospitality sector, will experience a delayed or slower economic recovery.

In light of this uncertainty, a number of industry experts have lowered their forecasts for nickel demand, reflecting negative market sentiment through end of 2020. Previously, demand for nickel through 2025 was expected to grow by approximately 3% per year to 2.8 million tonnes according to market research by Wood Mackenzie. Recovery of demand is expected to return in 2021.

Nickel pig iron production has increased substantially, and some industry analysts are predicting an oversupplied nickel market in the near term as a result. This development is putting additional pressure on producers of lower-grade material such as ferronickel, which is currently selling at significant discount.

Over the longer term, demand for nickel is expected to increase with the increased adoption of electric vehicles since nickel – along with cobalt – is a key metal needed to manufacture assorted energy storage batteries.

A shortage of nickel is anticipated over the coming years since current market prices are below incentive levels needed to develop new nickel projects.

Review of Operations

Moa Joint Venture (50% Interest) and Fort Site (100%)

$ millions, except as otherwise noted

2020Q2

2019Q2

Change

2020H1

2019H1

Change

PRODUCTION VOLUMES (tonnes)

 

 

 

 

 

 

Mixed Sulphides

4323

4306

-

8337

8642

-4%

Finished Nickel

4147

3969

4%

7983

8366

-5%

Finished Cobalt

425

415

2%

825

841

-2%

Fertilizer

69777

59665

17%

125866

126627

-1%

NICKEL RECOVERY (%)

86

86

-

84

85

-1%

SALES VOLUMES (tonnes)

 

 

 

 

 

 

Finished Nickel

4169

4073

2%

7942

8464

-6%

Finished Cobalt

353

429

-18%

734

889

-17%

Fertilizer

72071

66552

8%

103211

93509

10%

AVERAGE-REFERENCE PRICES (US$ per pound)

 

 

 

 

 

 

Nickel

5.54

5.56

-

5.66

5.59

1%

Cobalt

15.19

15.64

-3%

15.89

17.09

-7%

AVERAGE REALIZED PRICE

 

 

 

 

 

 

Nickel ($ per pound)

7.51

7.52

-

7.55

7.51

1%

Cobalt ($ per pound)

18.39

19.56

-6%

18.79

17

11%

Fertilizer ($ per tonne)

399

491

-19%

384

470

-18%

UNIT OPERATING COSTS(1) (US$ per pound)

 

 

 

 

 

 

Nickel - net direct cash cost

3.92

3.83

2%

4.1

4.19

-2%

Source: Sherritt


(To contact the reporter on this story: jemma.shang@steelhome.cn or 86-555-2238875 18155520624)
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