Stainless demand weak, nickel prices to decline: Eramet

Nickel and ferronickel prices are seen declining in the second half of the year despite the expected favourable seasonality. The market will be impacted by strong negative external economic factors, French mining group Eramet says in its H1 earnings report seen by Kallanish.

London Metal Exchange nickel prices are seen fluctuating around the level of $24,500/tonne in H2.

Third-quarter global demand for nickel from the stainless steel sector should remain weak and continue to slow because of high raw material prices and economic uncertainties. The latter include energy and sea freight prices that remain at historically high levels.

In H2, global nickel production will continue to grow, supported by Indonesia. At the nickel mining site of Weda Bay in Indonesia, the production target is confirmed at approximately 15 million wet metric tonnes for 2022.

H1 global stainless steel production was down by more than 3.5% year-on-year to 28.2mt, driven by the decline in Chinese output. Nickel inventories at the LME and Shanghai Futures Exchange (SHFE) decreased compared to end-2021, due to sustained demand for batteries. At the end of June, inventories totalled 69,000 tonnes, representing only three weeks’ consumption.

Eramet posted record-high half-year results, with turnover at €2.6 billion ($2.65 billion), up 79% year-on-year, driven by high price levels for both nickel and manganese.

Natalia Capra France