Nickel price climb fizzles

Nickel prices on the London Metal Exchange (LME) have declined by more than 8 per cent this week after shortage concerns calmed following a supply deal involving China’s Tsingshan Holding Group.

The London Metal Exchange three-month nickel prices dropped by 8.5 per cent to US$15,945 ($20,655) a tonne on March 4, marking nickel’s largest intraday decline since December 2016.

This followed nickel’s highest prices since September 2014, which peaked at $US19,689 ($25,348) on the LME last week.

Tesla chief executive Elon Musk in the same week stated that nickel was the company’s “biggest concern” in scaling lithium-ion cell production.

However, Tsingshan’s deal to provide 100,000 tonnes of nickel matte to Huayou Cobalt and battery materials maker CNGR Advanced Material has quelled market concerns over a nickel sulphate supply shortage with the lower three-month nickel prices.

Nickel matte is a vital component for batteries in EVs.

IGO closed at $6.52 yesterday, down from $7.08 on March 3.

Nickel Mines also saw a dip in its share price from $1.46 on March 3 to $1.30 on March 4.

According to Fitch Solutions, nickel mine production is expected to grow by 8.3 per cent year-over-year in 2021.

“We believe that global nickel production will drop significantly over 2020, mainly as major producer Indonesia’s nickel ore export ban remains in effect and the Philippines nickel sector recovers from COVID-19 pandemic headwinds,” Fitch Solutions stated.

“In the medium term, we expect the resumption of operations, which were previously shut down due to environmental concerns, and increased ore demand from China, will boost production growth alongside low base effects from the COVID-19 pandemic.”

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