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.

