Global Nickel Metals Report Q3 2017
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BMI View: We have revised down our nickel price forecast from USD10,500/tonne to USD10,250/tonne for
2017 as the global refined nickel market deficit narrows due to increasing production in Indonesia and a
decline in Chinese demand. After stabilisation in the coming months following a sharp decline in the yearto-
date, we expect prices to remain on a broad downtrend and average USD9,000/tonne by 2021 as
consumption in China remains weak and the market moves into a significant surplus.
Latest Developments And Structural Trends
due to a decline in global consumption and an improvement of global supply will mean prices will not
witness a return to the early-year high's of USD11,000/tonne and above. In terms of production, the
moderation of Indonesia's export ban announced in January 2017 will lead to a rebound in Chinese
refined production growth in the coming months, following a slowdown between 2014 and 2016.
Additionally, we now hold a more optimistic outlook for major nickel ore producer the Philippines,
following the news in May that anti-mining advocate Gina Lopez has been replaced as the head of the
Department for Environment and Natural Resources (DENR), which could have a positive knock-on
effect on refined production. On the demand side, China's preference for cheaper substitute, nickel pig
iron (NPI) and increasing NPI production from Indonesian smelters will continue to hinder demand for
refined nickel in the coming months. Despite this, an average decline of 6.5% y-o-y in the global
production of refined nickel during the first three months of 2017 suggests the market will remain firmly
in deficit in the coming months, offsetting the potential for a large drop in prices and reinforcing our
neutral view in the short term.