Summary: Global financial services provider Macquarie Group is calling for investment in the nickel industry, despite expectations of a near-term supply surplus.
According to foreign media reports, global financial services provider Macquarie Group is calling for investment in the nickel industry, despite expectations of a near-term supply surplus.
Macquarie consultant Jim Lennon said at the Paydirt Nickel conference in Perth that immediate investment in the nickel industry is needed to meet potentially "explosive" demand after 2025.
Lennon said: "COVID-19 has clearly had a negative impact on the fundamentals of nickel supply and demand, turning the market from deficit to surplus, and this situation could last for several years." The COVID-19 pandemic has led to a sharp decline in primary nickel consumption, while nickel production also fell in the first quarter of this year, Lennon said, possibly due to COVID-related disruptions in Madagascar and the Philippines.
In the first seven months of 2020, a surplus of 90,000 tonnes was recorded, with a surplus of 135,000 tonnes expected for the full year, compared with a deficit of 35,000 tonnes in 2019.
Lennon noted that global nickel usage is expected to fall by 7.3% by 2020.
Lennon told delegates: "The market is likely to return to balance by 2024 and move into deficit by 2025."
He pointed out that in the medium term, the growth rate of the stainless steel market and the pace at which the lithium battery market absorbs nickel will determine nickel demand.