26 April 2024 – The economic production of nickel is closely linked to the nickel content of the ore mined or not mined. Has the declining ore quality been taken into account in the calculation models? Molybdenum prices continue to rise significantly. And China’s real estate market is growing significantly again.
- Declining ore quality: nickel production affected?
- Molybdenum price continues to rise
- China's real estate market on the upswing
Declining ore quality: nickel production affected?
The economic production of nickel is closely linked to the nickel content of the ore mined or not mined. In addition, the proportion of particularly high-yielding nickel ores, which can therefore be processed profitably, is limited. But what happens if the declining ore quality was not taken into account in the calculation models?
Technologically not mineable
At the same time, there are deposits that are not mineable with current technologies or cannot be extracted on an industrial scale. For example, because they lie several thousand meters below sea level – and it is still technologically more challenging to send a machine, or even a man, to the bottom of a deep-sea trench than it is to send a man to the moon.
Environmental compatibility and market protection measures
There can always be technological leaps, of course, but since the quality of mined ores is declining worldwide and ever higher demands are being placed on the environmentally compatible production of raw materials – a glance at the EU CBAM regulation or the US Inflation Reduction Act is enough to prove this – the need to take realistic calculations and probabilities for the decline in ore quality into account has become greater.
Embellished figures remain embellished figures
Thus, the legitimate question arises whether this has been taken into account from the political side and also by the nickel associations. Politicians often make their figures look good, which has already been clearly demonstrated by the EU Green Deal. The nickel associations support the companies behind it to raise important funds for investments and often also nickel-consuming commercial enterprises, which have an interest in pushing down the prices for nickel in order to be able to buy cheaply.
Decreasing ore quality could deplete deposits faster
A declining quality of the nickel ores mined worldwide could thus lead to a faster depletion of the assumed reserves, and a too pessimistically estimated demand for the metal could lead to a much shorter-term undersupply of high-grade and low-grade nickel products. Or when completely conflicting numbers do not even account for a necessary expansion of production by 2050 due to increasing demand. Or consider that recyclable nickel just might not circulate freely on the world market due to “waste shipment regulations” or export bans.
Sanctions, consumers and politics
In addition, one of the most important high-grade nickel suppliers Russia is no longer opportune for many states and companies and consumers when it comes to their own EV battery. Or the origin politically undesirable, if you think about the US Inflation Reduction Act.
If you take all this into account in your calculation models, there could be a massive shortage in all nickel products a bit sooner – especially in western states. But that would not be in the interest of the nickel associations, would it?
Molybdenum price continues to rise
Molybdenum oxide prices have increased significantly in recent weeks and continue to rise. On the LME it went up yesterday by 3.28%, since 17 April even by 24.4%. In China, molybdenum oxide has increased by more than 28% in the same period. The impact is already noticeable in 316/316L stainless steel grades, which had recently rebounded in price.
China’s real estate market on the upswing
China’s real estate market is accelerating again. Compared with the previous year, it has even increased further. In the past few weeks, the average price of new apartments sold was 48 percent higher than a year earlier; for existing apartments, the figure was as high as 102 percent.
However, in view of the robust economic indicators, there is optimism that demand for real estate will continue to grow and availability will continue to decline.
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