April 6, 2023 – U.S. car dealers are selling more vehicles again. US scrap demand high and steady. Turkey needs about 6 million tons of steel scrap for reconstruction. And have analysts been too conservatively optimistic on nickel availability?
US car dealers sell more again
U.S. car dealers sold an annualized and seasonally adjusted 14.9 million vehicles in March 2023, up from 15.2 million in February. Still, the number rebounded year-over-year, coming in at just 13.4 million cars in March 2022 due to semiconductor bottlenecks. The recovery continues to be driven by corporate demand, which rose 28 percent from the same month last year.
Ferrous scrap demand in the United States remains high
Need for scrap from US steel producers remains high. In view of the sales figures from the automotive industry, for example, this is hardly surprising. Analysts expect demand for scrap to remain high for the rest of the year.
Turkish reconstruction continues to drives ferrous scrap
The Turkish government estimates that at least 5 million tons of steel will be needed for the reconstruction of the Iskenderun region following the severe earthquake at the beginning of 2023, which would correspond to a demand of around 6 million tons of steel scrap. This is likely to mean a large import requirement of scrap to Turkey, despite local processing.
Nickel: Availability faces new challenges
In 2022, Indonesia was among the very few nickel-producing countries to expand production of the stainless steel and EV feedstock. But for 2023, that increase in Indonesian production is already cooling significantly. And from the rest of the world, production expansion, which had already barely exceeded 1% in 2022, is not expected.
Tax benefits for EV vehicles drive demand
With further tax benefits for EV vehicles e.g. through the US Inflation Reduction Act, demand will also continue to rise in North America and production there will quickly fall behind demand. Tesla founder Elon Musk is often used as a reference here, repeatedly urging that nickel mining capacities urgently need to be further expanded.
Nickel: Estimates too conservatively optimistic?
Conservative estimates already suggest that before 2030 the deficit in nickel production is likely to be 250,000 tons per year. Our analyses show, taking into account the Indonesian increases from 2022 and those planned in 2023, that supply is already threatening to slip back into negative territory with a demand increase of barely more than 10% in 2024. And this does not take into account India’s expected demand of more than 300,000 tons of nickel per year in addition.
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