Nickel CBS March 2021

This quarter, London Metal Exchange nickel prices are set to record their worst performance since the same period a year ago after a potential game-changing battery nickel supply announcement from China's Tsingshan Holding Group Co. Ltd.(opens in a new tab) depressed bullish investor sentiment. The company plans to process nickel pig iron into high-grade nickel matte that can be converted into nickel sulfate for use in the electric vehicle battery sector. Tsingshan will supply Zhejiang Huayou Cobalt Co. Ltd.(opens in a new tab) and CNGR Advanced Material Co.Ltd.(opens in a new tab) with a combined 100,000 tonnes of nickel matte beginning in October.

The LME three-month nickel price dropped from a seven-year high of $20,110 per tonne in trading Feb. 22 to $15,948/t on March 30 — the lowest since November 2020 — on Tsingshan's announcement.

Access the Nickel Commodity Briefing Service March 2021 Full report(opens in a new tab) and Databook(opens in a new tab).

• Tsinghan's plans could potentially trigger the most significant structural supply-side change to the global nickel market since the company brought nickel pig iron to the wider market in the early 2000s.
• Tsingshan also announced that it plans to ramp up its nickel production in Indonesia significantly.
• We have therefore upgraded our global primary production forecasts significantly and expect global output to rise to 3.6 million tonnes in 2025 from 2.7 Mt in 2021.
• We expect Tsingshan's supply plans to cause the primary nickel surplus to widen to 312,000 tonnes in 2025 from 95,000 tonnes in 2021.
• This will cause the average LME three-month nickel price to fall to $15,650/t in 2025 from $17,396/t in 2021.

This article was published by S&P Global Market Intelligence and not by S&P Global Ratings, which is a separately managed division of S&P Global.

Read on the Market Intelligence platform(opens in a new tab).