Nickel
While Stocks Last
January 2020
In response to the potential supply squeeze, downstream producers have started tapping into the exchange inventories to ensure consistent production over the short-term.

In November, stocks remained flat as LME stocks began the month at 69.2kt and ended at 69.04kt. Deliverable Nickel Stocks in the SHFE, however, increased to 36kt from 27.5kt to begin the month. This follows a significant drawdown in the LME stocks in October from 147.7kt down to 66.3kt from news on Indonesian export bans.

Additional supply of mined nickel may come from Australia as Mincor Resources received approval for development of the Cassini nickel project in the Kambalda region of Western Australia. The nickel mine has received all key WA State Government approvals including clearing permits, approved mining proposal and project management plan to develop the greenfield nickel mine. Mincor plans to commence excavation of the Cassini box-cut in the March Quarter of 2020.

As manufacturers seek to secure supply in response to the looming nickel shortage, Australia’s Blackstone Minerals Ltd has signed a non-binding joint venture agreement with South Korea’s Ecopro BM Co to develop nickel, cobalt and other minerals for battery manufacturing. The Western Australia-based firm said Ecopro BM, South Korea’s largest electric vehicle battery cathode producer, will develop a downstream processing facility with Blackstone’s Ta Khoa Nickel Project in Vietnam. “Our Ta Khoa Nickel Project has significant potential to deliver the critical raw materials required for Ecopro’s cathode manufacturing process and meet the ever-increasing demand for high-nickel content cathodes driven by the imminent electric vehicle (EV) revolution,” Blackstone’s Managing Director Scott Williamson said. The agreement comes amid increasing headwinds in the lithium industry with sales of electric vehicles (EV) in China, the world’s largest market, falling nearly a third in September. Australia has billed itself as a key supplier for minerals critical to future industries like EVs and green power, but developers hoping to move into battery chemicals production have struggled to secure project finance.

In December, the nickel market price continued declining with average price falling from US$15,336/t (US$6.96/lb) in November to US$12,700/t (US$5.76/lb) in December. The nickel price experienced its highest level in four years due to supply concerns stemming from the Indonesian government’s export ban, however prices eased as the country decided to allow select producers to export prior to its previously announced deadline.

In addition to the export ban in January 2020, the Indonesian government raised royalties on nickel ore sales to 10%, up from 5% previously while adjusting charges on other minerals.