Geopolitical and Covid-19 pandemic-related uncertainty may impact demand for carbon and stainless steel raw materials such as manganese and nickel in the second half of the year, says French miner Eramet.
A recovery in nickel demand in China is expected in the second quarter after the slowdown registered in Q1, the firm says in its Q1 financial report monitored by Kallanish. In Europe, however, demand could continue to slow due to Russian nickel supply disruptions caused by the Ukraine war, and continued high energy prices. Growth in nickel supply from Indonesia however is seen supporting global demand in Q2, offsetting the reduced Russian supply.
In Weda Bay in Indonesia, Eramet confirms the production target for the year at approximately 15 million wet metric tonnes (wmt). Nickel ore exports at the miner’s New Caledonian subsidiary, Société le Nickel (SLN), are also targeted this year at over 4m wmt.
Global stainless steel production stood at 13.9 million tonnes in Q1, reflecting a 3.6% year-on-year decline. While China reported a fall of 10.3% to 7.5mt, stainless output increased in the rest of the world by 5.7% thanks to higher production in Indonesia and the US. Demand for primary nickel also increased by 4.3% y-o-y.
The global nickel market supply and demand balance was in slight surplus in Q1. Nickel inventories at the London Metal Exchange (LME) and Shanghai Futures Exchange (SHFE) remained low, totalling 80,000t at end-March 2022, representing approximately five weeks of consumption, Eramet concludes.
Eramet posted strong Q1 revenue growth to €1.2 billion ($1.27 billion), up by nearly 80% versus Q1 2021. The company talks about a “particularly favourable price environment, in a context of strong supply tension in all of Eramet’s markets, accentuated by the war in Ukraine.”
Natalia Capra France