Nickel deficit of 100,000t expected for 2H17; Norilsk Nickel forecasts


MMC Norilsk Nickel

MMC Norilsk Nickel is a Russian nickel and palladium mining and smelting company. Its largest operations are located in the area near the Yenisei River in northern Russia. It also has holdings near the Kola Peninsula, area of Norilsk-Talnakh and in western Finland at Harjavalta. It operates in Southern Africa in Botswana, South Africa, and western Australia.


Firstly, company’s headquarters are in Moscow. Also it is the world’s leading producer of nickel and palladium. International ranking agencies ranked it among the top ten copper producers.

Secondly, the nickel deposits of Norilsk-Talnakh are without doubt the largest nickel-copper-palladium deposits in the world.


Production divisions

Following, the company currently has five main operational divisions. Beginning with The Polar Division of MMC Norilsk Nickel and ancillary activities, located in the Taimyr Peninsula. After comes Kola MMC, and ancillary activities, located in the Kola Peninsula. In Finland there is Norilsk Nickel Harjavalta, Finland’s only nickel refining plant, purchased from OM Group in 2007. Later N.N. in Africa, which includes stakes in mines in Botswana (85% of Tati Nickel) and in South Africa (50% of Nkomati), both formerly owned by Lion Ore. Finally there is Norilsk Nickel Australia, which owns several mines and facilities in the western part of the country.


Nickel forecasts

MMC Norilsk Nickel, as one of the world’s largest Nickel producers, expects the market deficit to widen to 100,000 tons by the end of 2017. These news were carried out at the International Nickel Conference in Lisbon. The company’s head of market research explained to delegates their possible expectations.

“We are cautiously positive for 2017. We expect the deficit to widen to 100,000 tons in a base case scenario, but this situation remains unstable due to a number of material uncertainties.” Denis Sharypin said. (Fast Markets)

According to data from the International Nickel Study Group (INSG), the nickel market moved into a deficit of 49,700 tons in 2016 from a surplus of 91,400 tons in 2015.

“Indonesia could change this drastically, however,” he said.


Indonesian Nickel Ore


The Indonesian government surprised markets in January when it relaxed the country’s three-year ban on unprocessed ore.

In terms of demand, there are a few factors that might affect that forecast. For example stainless steel production growth in China and Indonesia and the high off take by alloys and strong increase in batteries.

In terms of supply, the political situation in the Philippines with its potential to shut down 20 or more mines is just one variable that could affect forecasts.

In Indonesia, around 5 to 6 million tons of low grade ore are available and ready for export. It has also the potential to impact the forecast.

“The worst case scenario is that a substantial surplus is also possible,” said Denis Sharypin.

Indonesia produces 17 million tons of nickel ore per year. 10 million tons of this quantity is low-grade ore. The country’s nickel smelting capacity is currently 16 million tons and may reach 18 million this year.

Low-grade ore is harder to process and smelters have been unwilling to take it at first. But in order for miners to get high-grade ore, they have to dig through low-grade ore first, which then gets thrown out.


These predictions about Nickel Ore deficit will likely come true in 2H17.

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