Critical Minerals and Energy Intelligence

Q1 News Highlights for the Nickel Market

Some highlights from around the world in the nickel market for this past quarter.

Nickel Prices Experience Notable Decline: After peaking at over $31,000 per metric ton in early January, nickel prices saw a substantial drop, reaching approximately $22,500 by late March. This downward trend was influenced by increased supply and tempered demand, particularly from the stainless steel sector.

Surge in Global Nickel Production: Global primary nickel production rose by 6% in Q1 2023, driven by the ramp-up of new projects, especially High-Pressure Acid Leach (HPAL) operations, and increased Nickel Pig Iron (NPI) output in Indonesia, which grew by 14% compared to Q1 2022.

BHP Reports Increased Nickel Output: BHP announced an 11% quarter-on-quarter increase in nickel production, totaling 19,600 tonnes for Q1 2023. However, the company adjusted its annual production guidance downward to 75,000–85,000 tonnes, citing factors such as weather-related disruptions and quality control measures.

Nornickel’s Production Declines Amid Sanctions: Russian mining giant Nornickel reported a 10% year-on-year decrease in nickel production, amounting to 42,000 metric tons in Q1 2023. The decline was attributed to the accumulation of work-in-progress inventory, with plans to process it in the subsequent quarter

Atlantic Nickel Maintains Strong Performance: Brazil’s Atlantic Nickel sustained robust operational results, producing 4,000 tonnes of nickel in concentrate during Q1 2023. The company achieved an adjusted EBITDA of $51.2 million and maintained a competitive C1 cost of $3.37 per pound, reflecting its efficient operations

Stainless Steel Production Impacts Nickel Demand: Global stainless steel production, a primary consumer of nickel, declined by 4% to 13.2 million tonnes in Q1 2023. The decrease, notably in regions outside China, contributed to a slight surplus in the nickel market during the quarter

Indonesia’s Growing Influence in Nickel Pricing: Indonesia’s nickel production surged to over 2 million tonnes in 2023, accounting for 55% of global output.

Citibank Projects Lower Nickel Prices: In anticipation of market conditions, Citibank forecasted a decline in nickel prices to approximately $18,000 per metric ton in Q1 2023, reflecting expectations of reduced demand and increased supply.

LME Nickel Inventories Show Mixed Trends: While nickel inventories on the London Metal Exchange (LME) and Shanghai Futures Exchange (SHFE) decreased to 45,000 tonnes by the end of March, non-exchange inventories saw an uptick, indicating a complex supply-demand balance in the market

Strategic Investments and Market Adjustments: Major industry players, including BHP and Atlantic Nickel, continued to invest in expanding their operations and refining processes to adapt to market fluctuations, emphasizing the sector’s commitment to meeting evolving global demand.

Anthony Milewski

Chairman, Nickel 28 Capital

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