Nickel surplus to grow in 2021 on Indonesia: Norilsk

Norilsk Nickel expects the nickel market will widen its surplus by 9pc in 2021, as Indonesian nickel pig iron (NPI) production outpaces greater demand.

The nickel surplus will rise to 95,000 metric tonnes (t) in 2021 from 87,000t in 2020, the Russian nickel miner said at the annual Institute of Scrap Recycling Industries (ISRI) conference yesterday.

Indonesian producers will add 370,000t of NPI supply in 2021, coupled with other smaller increases, lifting total nickel output to 2.7mn t, while greater stainless steel and battery demand will lift consumption only to 2.65mn t.

Norilsk estimated that expanding Indonesian NPI production will free up producers of class 1 nickel metal to target non-stainless steel industries for customers. Stainless steel accounts for about 70pc global nickel consumption, according to the Nickel Institute.

The market had been on a streak of deficits between 2017-2019, averaging a 89,000t annual shortfall over those three years, according to the company.

Production of 300-series stainless steel in Indonesia will also rise, the result of more than doubling output from producers Tsingshan and Delong between January and April of 2021 compared to the same period of 2020.

All major regions are projected to lift stainless output, led by China, Norilsk said. In Europe, the Middle East and Africa, stainless production will increase by 8pc to 7.5mn t, followed by Indian and US volumes, which will rise by 11pc and 12pc to 3.5mn t and 2.4mn t, respectively.

At the same time, nickel consumption will receive a bump from electric vehicle (EV) orders, the sales of which roughly doubled in Europe in 2020. Norilsk highlighted that global stimulus spending and efforts to achieve carbon neutrality will play a large role in driving this demand. It estimated between 600,000-900,000t/yr of additional consumption related to batteries by 2030.

By Zach Schumacher

Stainless steel raw materials t