Nickel will be surplus by 1244,000 tonnes and 171,000 tonnes in 2022 and 2023

The International Nickel Research Group (INSG) has met on 17 and 18 October 2022. Government and industry representatives from the member States, observers and several international organizations attended the meeting.

Current nickel market trends were extensively discussed by government and industry participants during the INSG meeting. The combined impact of the pandemic and the situation in Ukraine has led to energy constraints, higher inflation, and lower economic growth, which has led to increased uncertainty in global commodity markets.

INSG expects negative growth in the stainless steel industry in 2022, with it increasing the use of nickel in electric vehicle (EV) batteries. Both industries are expected to expand in 2023.

Indonesia's nickel-pig iron (NPI) production is expected to continue to rise, while China's NPI production will decline further; Indonesia's NPI conversion to high-ice nickel will surge. Also in Indonesia, high-pressure acid immersion (HPAL) plants are trying to continue to increase nickel and cobalt hydroxide (MHP) production. The two nickel intermediates (high-ice nickel and MHP) will be exported to China and further processed into nickel sulfate to produce electric car batteries.

Global native nickel production in 2021 was 2.612 million tons, consumption was 2.775 million tons, and the supply gap of nickel market in 2021 was 163,000 tons.

INSG expects primary nickel production to reach 3.036 million tons in 2022 and 3.387 million tons by 2023; primary nickel consumption to increase to 2.892 million tons in 2022 and 2023, and the nickel market balance will shift to a surplus of 144,000 tons and 171,000 tons in 2022 and 2023.

Historically, oversupply has been associated to LME deliverables, but surplus in 2023 will be due mainly due to non-standard nickel (mainly nickel sulfate).