December 7, 2021 – Nickel inventories on the LME have already fallen by more than 59% in 2021. And about 50% of the remaining inventories are already reserved. Indian aluminium is expected to become scarce and expensive. While European CO2 emissions have risen by 18%, CO2 emissions in China have fallen. Evergrande is getting government support in the form of a government risk management task force.

Stainless Espresso: LME nickel inventories down by 59% since April 2021
Stainless Espresso: LME nickel inventories down by 59% since April 2021

LME nickel inventories down significantly

Nickel inventories on the European LME have fallen by more than 59% since April 2021. Of the remaining nickel inventories, half are already reserved and close to physical delivery. The most important buyer: China. The Asian country imported more than 208000 tonnes of nickel from January to October – which corresponds to an increase in demand of more than 96% compared to 2020.

SHFE nickel inventories below 6,000 tonnes

Nickel inventories on the SHFE do not paint a much better picture. Nickel inventories on the SHFE have fallen below 6,000 tonnes.

Competition for nickel picks up

At the same time, the first producers are positioning themselves to put their higher-grade nickel products in a more positive light for 2022. It quickly becomes apparent that the prices on the purchasing side for less processed products are to be depressed and those on the refined side pushed up. This will certainly lead to tougher competition between e.g. EV battery manufacturers and stainless steel plants in the future.

Indian aluminium is becoming scarce and expensive

Indian aluminium producers have warned that domestic production could be negatively affected by high coal prices and scarce energy supplies. Media report that currently aluminium producers would only be assured 50% of their supply by Coal India. In addition, there would be a shortage of trains to transport the coal to the manufacturers’ power plants. A power outage of just two hours at an aluminium smelter would result in the plant having to go into maintenance for at least 12 months.

China: CO2 emissions to fall by 18% by 2030

The Chinese Ministry of Industry and Information Technology has released the plan for reducing CO2 emissions by 2030. According to this plan, CO2 emissions per industrial unit are to be reduced by 18%. In addition, other pollutant emissions are also to be reduced by 10%.

Europe’s CO2 emissions rise, China’s fall

As YaleEnvironment360 reports, European CO2 emissions shot up by 18% in the second quarter of 2021. While in the same period, China’s CO2 emissions would have increased by only 1% and even decreased by 0.5% in the third quarter compared to the same period.

Causes for the changes

While the coal shortage in China has influenced emissions there, in Europe it is not only the improving economy but also its own supply problems with natural gas that are likely to lead to an increased use of coal.

Thus, the two regions will continue to have a race to see who can reduce their CO2 emissions the fastest and the most.

Evergrande gets state risk management

The struggling Chinese real estate company Evergrande, after announcing that it would not be able to meet a current repayment obligation, is getting a working group from the People’s Government of Guangdong Province at its own request. The task force is to monitor Evergrande’s risk management and maintain normal operations in the interest of all stakeholders.

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