August 2022
For the September quarter, the European spot price of nickel is forecast to be US$23,500/t. Mounting distrust of the London Metals Exchange (LME) as a benchmark and trading platform has led to reduced interest.

Total trading volumes have decreased by 45% in the June quarter compared to the March quarter of 2022. Prices are expected to continue easing.

AME forecasts an annual average of US$25,406/t in 2022, which will flow down to US$20,500/t in 2023. Elevated prices and new projects coming online has been increasing supply. Nickel Industries has recorded a 40% increase in production in the June quarter from Angel Project’s ramp-up.

Nornickel saw a 26% increase in y-o-y production for the first half of 2022 due to accumulated stockpiles. At the same time, demand from the battery sector has been wavering due to an increasing preference for the lithium iron phosphate (LFP) battery. Which is cheaper to produce.

Although Nornickel’s CEO has already been heavily sanctioned by the West, no penalties will be enforced on Russian nickel deliveries to the LME. The exchange has restated that doing may lead to further market destabilisation.

The EU is proposing a Carbon Border Adjustment Mechanism (CBAM), in which imports will have a carbon certificate detailing its carbon price paid. This scheme is intended to prevent companies from offshoring their emissions to countries where regulations are more relaxed. It will also discourage the import of carbon intensive goods.

The more countries adopt the CBAM scheme, the more producers will be incentivised to decarbonise their processes. This is expected to increase the cost of nickel production, especially in Indonesia where relatively little renewable energy has been deployed. In the medium to long-term, this carbon label will drive up nickel price.

BHP has begun the transition towards solar energy at Nickel West. The first solar panel has been installed at the Northern Goldfields Solar Farm. Over 20k solar panels will be installed by the end of 2022 to provide for the Leinster mine. Another 51k will be used to power Mount Keith.

This project is a collaboration with TransAlta. A 10.7MW farm and a 10.1MW battery will be constructed for Leinster. And a 27.4MW farm will be constructed at Mount Keith. The project will provide up to 100 jobs to the region and eliminate 54ktpa of Scope 2 emissions.

In the US, PolyMet Mining and Teck American have formed a 50:50 joint venture called NewRange Copper Nickel LLC. This combines their respective NorthMet and Mesaba projects on the Minnesota Mesabi Iron Range. NorthMet is a low-grade sulphide project that is awaiting the approval of a 32ktpd mining and processing facility. It is located near existing iron ore mines with a tailing storage facility available.

While Mesaba will be a 30-year open pit operation producing nickel and copper concentrates. The joint venture will focus on the production of low carbon critical minerals for green energy development.