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Nickel briefly tests level below $15,000/t

  • : Metals
  • 25/01/08

Benchmark nickel on the London Metal Exchange (LME) fell below $15,000/t for the first time since October 2020 at the end of last week as the ongoing strength of the US dollar, increasing Class 1 oversupply and sluggish physical demand combined to sink the contract to a fresh low.

The three-month nickel contract fell to $14,995/t on 3 January, the lowest since 8 October 2020. The official price recovered this week and was at $15,380/t in today's official trade as the US dollar moved lower on reports that US president-elect Donald Trump is scaling back plans to impose sweeping tariffs on imported goods. Near-term direction is likely to be determined by a combination of macro factors, supply-demand shifts and Indonesian nickel pig iron (NPI) prices.

The global refined nickel market was in a surplus of 135,000t last year, according to Australian bank Macquarie. Russian Class 1 nickel producer Norilsk Nickel (Nornickel) pegged the total market surplus at 150,000t, approximately 130,000t of which is connected to high-grade production. The continuing rapid surge in processing capacity for Class 1 nickel metal in Chinese and Indonesian refineries is due to drive a rise in LME-held stocks to provide the biggest source of price downside this year, with Macquarie's research indicating 300,000t of new Class 1 refining capacity is due to come on line during 2024-26. Market participants surveyed by Argus through December said that Class 1 fundamentals are becoming aligned with the surplus story around other battery metals such as cobalt and lithium, with refined nickel due to be in structural oversupply for years to come on rich upstream and downstream Chinese investments.

The rise in Chinese and Indonesian origin high-grade nickel supply is set against a tight Class 2 space, driven by a drop in global production of nickel pig iron (NPI) and ferro-nickel. Macquarie said ferro-nickel and NPI output is projected to drop by 3pc year on year in 2024 even as global stainless steel production rises by 3.5pc. But over the same period, Indonesian and Chinese Class 1 and nickel sulphate output is expected to grow by 30pc year on year, adding 200,000t of nickel units in the market. This supply glut together with capabilities that allow NPI to be converted to LME-deliverable metal (via matte) will keep LME prices near the marginal cost of NPI plus conversion. Current NPI-class 1 conversion costs are pegged at $3,500-4,000t, market participants told Argus.

The spread between benchmark nickel on the LME and the Argus assessment for NPI 10-14pc China main port duty unpaid fell from $6,720.44/t at the end of the second quarter of 2024 to $4,093.33/t at the end of December. Three-month nickel on the LME shed 14.5pc in the second half of 2024, while the Argus NPI assessment rose by 2.23pc over the same period to show a closer alignment of the global benchmark with NPI conversion costs.

The narrowing of this spread is likely to increase the positive correlation between nickel prices and nickel ore prices this year. Tight ore supply in New Caledonia and Indonesia led to a surge in nickel ore prices in 2024, which also raised downstream NPI prices. Market participants told Argus that Indonesia could pursue a strategic reduction of ore licences (RKAB) in 2025 to support prices given weak demand-side fundamentals and the pressure on the government to preserve margins for domestic producers. French nickel mining group Eramet revised down its 2024 ore production guidance at PT Weda Bay Nickel to 29mn wmt in October from an initially expected 40mn-42mn wmt because of permit restrictions.

LME nickel is expected to find price support at the higher end of $15,000-16,000/t this year. A move above this range depends on further supply side cuts. Macquarie identified output cuts of 100,000-150,000t in Indonesia and 400,000t in the rest of the world over the past two years, driven by tight ore supply and falling Class 2 production in Indonesia and the inability of non-Indonesian suppliers to compete. A demand-side recovery in key consumption markets could also widen price bands for nickel on the higher end, as Nornickel projects nickel demand growth in the battery market to rise to 42,000t this year, up from 19,000t in 2024.

LME Nickel three-month official price $/t

Nickel pig iron 10-14% cif China main port duty unpaid $/t

Argus NPI 10-14% cif China diff to LME Nickel $/t

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25/02/11

Rain shuts Australian copper, fertilizer rail line

Rain shuts Australian copper, fertilizer rail line

Sydney, 11 February (Argus) — Torrential rains have shut Australia's Mount Isa rail line, which links phosphate and copper mines to the Port of Townsville in Queensland, with no reopening timeline in place. "The North Coast and Mount Isa rail lines have suffered severe damage with approximately 177 defects found so far," rail operator Queensland Rail (QR) said on 10 February. But the company has not yet examined parts of the line because of safety concerns, QR told Argus , preventing it from coming up with a reopening plan. Mining firm Glencore's Mount Isa copper and Australian manufacturer Incitec Pivot's Phosphate Hill fertilizer mines use the line to move commodities from production sites to the Port of Townsville, for export or distribution to other parts of Australia. Australian mining firm Centrex also uses the line to ship phosphate rock from its Ardmore phosphate project. Wet weather forced the Port of Abbot Point, located just south of Townsville, to close from 31 January to 5 February . The Port of Townsville remained open throughout that period, despite large parts of the city flooding. Incitec Pivot's Phosphate Hill plant is also currently facing non-weather-related challenges. The company lowered the mine's forecast production by 7pc to 740,000-800,000t for the 2025 financial year to 30 June, because of gas supply challenges. Argus ' MAP/DAP fob Townsville price was last assessed at $620-640/t on 6 February. By Avinash Govind and Tom Woodlock Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump imposes new tariffs on steel, aluminum


25/02/11
25/02/11

Trump imposes new tariffs on steel, aluminum

Washington, 10 February (Argus) — US president Donald Trump today imposed a 25pc tariff on all US imports of steel and aluminum, although he said he would consider making an exemption for imports from Australia. In remarks to reporters at the White House Trump complained that many of the steel and aluminum tariffs he imposed since 2018 have been moderated or reduced for some countries. Currently Australia and Canada can export any steel and aluminum they want to into the US without tariffs, while Mexico can export steel melted and poured in the US-Mexico-Canada (USMCA) agreement region into the US without tariffs, while any material with an origin outside of USMCA is subject to 25pc tariffs. "Our nation requires steel and aluminum to be made in America, not in foreign lands," Trump said. "It's 25pc without exceptions, and that's all countries, no matter where it comes from, all countries." But Trump, prompted by reporters, confirmed that he may make an exemption for Australian-sourced steel, after Canberra threatened to take reciprocal measures. "We have a surplus with Australia, one of the few," Trump said, referring to an overall trade surplus the US runs with Australia. "And the reason is they buy a lot of airplanes." Trump said he spoke with Australian prime minister Anthony Albanese earlier today. "I told him that [steel tariff exemptions] is something that we will give great consideration." A similar exemption for the UK is unlikely since the US already is running a trade deficit with that country, Trump said. Trump contended that his initial volley of tariffs in 2018 led to the creation of hundreds of thousands of jobs in the US and boosted economic growth. A 2019 study from the Federal Reserve Board that was updated in 2024 estimates that taking into account retaliatory tariffs, there was a net decrease in US jobs and economic growth from the tariffs. US oil and gas midstream companies were among the industries hit by the 2018 tariffs, which led to higher costs for pipeline steel. Most steel imports from non-tariffed US steel imports are heavily reliant on the countries that are currently not subject to US tariffs, with their volumes making up 80pc of the 26.2mn metric tonnes (t) of steel products imported in 2024, according to US Department of Commerce data. Steel tariff rate quota (TRQ) systems are in place for Argentina, Brazil, the EU, Japan, South Korea and the UK for steel products, with specifics dependent on the country. The CME Midwest hot-rolled coil (HRC) futures market jumped today, after Trump said on Sunday he would impose new tariffs, by $51/short ton (st) for March to $856/st, while April increased by $48/st to $858/st. Steel costs would rise by $6.38bn based on the $25.5bn value of 2024 steel imports from those nontariffed countries, if volumes remained the same. Those higher costs would lead to more US steel mill price increases, with one buyer expecting another round of price increases coming soon from US steelmakers. Steelmaker Nucor has increased its published hot-rolled coil (HRC) spot price by $40/short ton (st) in the last three weeks to $790/st. Other steelmakers like ArcelorMittal USA, Cleveland-Cliffs, and US Steel are at $800/st offers for their spot HRC. Canada key aluminum supplier In the aluminum market, the US imported over 6mn t of products in 2024, according to customs data. Canadian aluminum exporters currently have no restrictions on their volumes into the US. They shipped the highest volumes into the US and are responsible for an even larger share of primary aluminum imports. Current US primary aluminum smelting capacity, excluding idled operations, is around 795,000t/yr, which equaled less than one-third of Canadian imports and one-fifth of total imports. There are multiple idled primary aluminum facilities and a greenfield plant currently under construction, but observers and company representatives challenged the feasibility of idled plant restarts in the past. TRQ systems exist for US aluminum imports from Argentina, the EU, and the UK. By Haik Gugarats Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump seeks to end output of zinc-based penny


25/02/10
25/02/10

Trump seeks to end output of zinc-based penny

Houston, 10 February (Argus) — US president Donald Trump ordered the US Treasury Department to stop making the zinc-heavy penny, lamenting the coin's production costs, but any such effort may require more than just an executive directive. Trump on Sunday targeted the "wasteful" penny in a social media post, saying the US "for far too long" has minted the coin, "which literally cost us more than 2¢." The US Mint in its latest fiscal year lost $85mn producing pennies, with unit costs increasing by 20pc to 3.69¢ from 2023. Metal market participants do not expect a halt in penny production to materially reduce demand for zinc, which accounts for 97.5pc of the 1¢ piece's composition. Copper comprises the balance. "It doesn't take a whole lot of metal to make pennies," one source told Argus . The Mint shipped 3.2bn pennies last year, consuming 7,732 metric tonnes (t) in zinc from October-September. In contrast, the US imported 584,144t of unwrought zinc during the same timeframe. Tennessee-based Artazn, which provides the zinc blanks used in the Mint's penny production, did not respond to a request for comment. Conversely, the Mint lost nearly $18mn making nickels, which would become the lowest-denominated coin if Trump has his way. Unit costs for the 5¢ piece were higher than the penny's, increasing by 19pc to 13.78¢. Still, it remains unclear whether the president — through the Treasury — has the authority to unilaterally end circulation of the penny. The US Constitution gives Congress the exclusive power to "coin money" and determine values, but Treasury secretary Scott Bessent may be able to halt new minting until legislative action is taken. The Treasury and the Mint did not respond to requests for comment. Trump's efforts echo past attempts by his predecessors and other politicians to do away with the penny, but to no avail. Former president Barack Obama questioned the coin's function in 2013, and former Sen. John McCain and current Rep. Claudia Tenney (R-NY) filed bills in 2017 to suspend output for 10 years. By Alex Nicoll Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Tantalite prices surge on DRC conflict


25/02/10
25/02/10

Tantalite prices surge on DRC conflict

London, 10 February (Argus) — International tantalite prices rose sharply over the past two weeks following renewed violence in the Democratic Republic of Congo (DRC) and the end of the lunar new year public holiday in China. Argus last assessed prices for minimum 25pc tantalite at $80-88/lb cif main ports on 6 February, up by around 8pc and in a larger range compared with $75-81/lb on 28 January. And prices are expected to continue to rise in the near term. The Argus index surged as Chinese consumers returned to the market after the lunar new year holiday with limited stocks, urgently looking to secure material from central Africa amid escalating conflict in eastern DRC. The M23 militant group took control of Goma in North Kivu province at the end of January, and has advanced towards Bukavu in South Kivu in recent days, despite announcing a ceasefire last week. An emergency summit of African leaders on 8 February urged all parties involved in the conflict to hold peace talks within five days and to open humanitarian corridors. M23 have captured or surrounded several mine sites for the 3T conflict minerals — tantalum, tungsten and tin — prompting local artisanal mining companies to flee and due diligence organisation ITSCI to withdraw from multiple territories in the region. Most recently, M23 took control of Nyabibwe town in South Kivu, close to the Nyabibwe tin mine. The extraction, transport, trade, handling and export of minerals produced at mines occupied by non-state armed groups goes against OECD guidelines for responsible mineral sourcing, which means most smelters and downstream original equipment manufacturers (OEMs) will not accept material mined in areas under M23 control. The rapid advance of M23 has prompted a push among mining firms to export material from DRC to avoid possible looting, market participants said. And banks in South Kivu are out of cash, further encouraging artisanal mining firms in the area to sell material quickly. Challenging year ahead M23's expansion in DRC has come at a time when global tantalite supply is already squeezed. The militant group's takeover of the mining town of Rubaya in May last year, a recognition dispute between ITSCI and the responsible minerals initiative, the implementation of the US' section 301 tariffs on Chinese tantalum products, and generally sluggish demand from the downstream electronics industry meant that many smelters worked through their stocks in 2024 and started this year with limited inventories. "Compared to last year, there's not much material sitting in the supply chain. 2024 was the year of decreasing inventory and now we are starting to pick up more units," a tantalite consumer said. OEMs and smelters have over the past year faced pressure from major technology companies such as Apple to cut Rwandan and DRC tantalite from the supply chain, because of the increased risk of mineral fraud. Some tantalite consumers have aimed to diversify their supply chains with material produced in other African countries including, Ethiopia, Mozambique and Sierra Leone. But political unrest has also disrupted supply from Mozambique in recent months, and much less material is available from other origins compared with mines in the Great Lakes region. "This is a challenging year for tantalum. We are facing very restricted supply chains," a consumer said. By Sian Morris Argus Tantalite Prices Feb 2025 $/lb Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexico inflation slows to 4-year low in January


25/02/10
25/02/10

Mexico inflation slows to 4-year low in January

Mexico City, 10 February (Argus) — Mexico's consumer price index (CPI) eased to an annual 3.59pc January, the lowest in four years, as deceleration in agriculture prices offset faster inflation in energy and consumer goods prices. This marks the lowest annual inflation since January 2021 and a significant slowdown from July's annual peak of 5.57pc, which was driven by weather-impacted food prices. The result, reported by statistics agency Inegi on 7 January, was slightly below than the 3.63pc median estimate from 35 analysts polled in Citi Research's 5 February survey. It compares with the 4.21pc headline inflation in December, marking five months of declines in the past six months. Mexican core inflation, which excluded volatile energy and food, sped slightly to 3.66pc in January from 3.65pc in December, while non-core inflation decelerated to 3.34pc from 5.95pc the previous month. Movement, in the non-core, said Banorte, was mostly explained by a positive basis of comparison, and "will reverse as soon as the second half of February to push the headline metric above 4pc," said Banorte. Core inflation accelerated slightly to 3.66pc in January from 3.65pc in December, marking the second uptick after 22 consecutive months of deceleration. Services inflation slowed to 4.69pc from 4.94pc, while consumer goods inflation ticked up to 2.74 from 2.4pc. Non-core inflation slowed sharply to 3.34pc from 6.57pc in December. This was largely due to base effects, Banorte said, adding these base effects are likely to fade this month to speed headline annual inflation back above 4pc. The base effects most clearly impacted fruit and vegetable price inflation, contracting 7.73pc in January from 6.65pc annual inflation the previous month. Moving forward, agriculture prices are highly exposed to the coming hot, dry season in Mexico, with the La Nina climate phenomenon, adding a layer of uncertainty. Meanwhile, energy inflation accelerated to 6.34pc in January from 5.73pc the previous month, driven by higher LPG prices. Electricity inflation, meanwhile, sped to 4.32pc in January from 2.65pc in December, while inflation slowed to 0.02pc in January for domestic natural gas prices from 5.67pc in December. Monetary policy The January inflation report followed the central bank's decision Thursday to reduce its target interest rate to 9.50pc from 10pc. This was the bank's sixth rate cut since March 2024, winding down from 11.25pc. The 4-1 decision marked an acceleration in the current rate cycle, opting for a half-point reduction rather than the previous five 25-basis-point cuts. In board comments with the announcement, the bank cited "significant progress in resolving the inflationary episode derived from the global shocks" in 2021 and 2022. These triggered rate hikes from 4pc in June 2021 to 11.25pc in April 2022, the target rate's historic high. Taking into account the "country's weak economic activity" and this progress in reducing inflation, the board said it would "consider adjusting [the target] by similar magnitudes" at upcoming meetings. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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