20 October 2022 – The INSG has pointed to increased demand for nickel in 2023. Surplus only in battery nickel? And is the aluminium market prepared for supply disruptions?
Upswing in stainless steel sector, growth in batteries, and growing competition
In its October meeting, the International Nickel Study Group (INSG) pointed to increased demand for nickel in 2023. In particular, the upswing in the stainless steel sector and the continued growth in batteries for electric vehicles.
Stainless steel stocks with significant gaps
This also confirms the assumptions of various market participants that there will be significant gaps in stainless steel inventories from 2023 onwards.
Surplus primarily only for battery nickel
Even though INSG sees a surplus in nickel production coming in 2023, this surplus relates primarily to products that are not used in stainless steel production, but are mostly used for EV batteries.
Shortfall in supply
As already predicted by us and recently confirmed by major European stainless steel producers, there is a shortage in nickel supply and an emerging competitive situation in the various categories.
Scrap export ban in the overall context
If one considers the regulatory efforts to prevent scrap exports in this overall context, which we have already reported on several times, these efforts are no longer surprising.
Aluminium market prepared for supply disruptions?
For several weeks now, there have been speculations and reports about the possibility that not only the United States or the European Union could impose further severe sanctions on Russian aluminium. At the same time, the London Metal Exchange is discussing whether Russian commodities should be banned from the trading venue.
LME would be forced to implement laws
A single measure by, for example, the European Union and the United States is considered by analysts to be less effective, but it ignores an important factor. In the event of legal sanctions against Russian commodities, the LME would be forced to remove them from trading as well. Which the LME has already done in certain cases, e.g. when the British government imposed a punitive tariff on nickel originating in Russia.
This is likely to lead to some distortions in the supply of aluminium, should Russia actually be banned from these markets.
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Disclaimer: Many things here represent our opinion. Others are information from the Internet. We can therefore never claim to be correct or complete. And never base a business decision solely on the news you receive from us.
