Page 54 from: Recycling International – July/August issue 2023

MARKET ANALYSIS

Support erodes amid
global uncertainty
Nickel prices fell in the second quarter of 2023 as production surpluses and

diverging regional economic prospects weighed on investor sentiment.

in 2023, followed by 3.6% growth in
2024. By region, worldstainless sees
stainless steel consumption declining
6% in Europe/Africa in 2023 and falling
4.1% in the Americas this year. In con-
trast, Chinese stainless steel demand is
projected to increase 1.1% in 2023 and
2.7% in 2024. Stainless still mills in the
West are increasingly focused on sus-
tainability goals, with Finland-based
Outokumpu Oyj having recently
announced ‘towards-zero stainless
steel’ initiatives with production part-
ners in Europe.
For stainless steel recyclers in the
West, material prices have generally
followed nickel prices lower. The Davis
Index reports the price of 304 (18-8)
stainless steel solids in the United
States recently dipped to 54.5 cents
per pound delivered processor yard,
down from more than 70 cents per
pound earlier in the year. Despite lack-
lustre local stainless steel market con-
ditions in many of the advanced econ-
omies, trade flows of recycled stainless
steel started the year on a positive
note. According to US Commerce
Department data, exports of stainless
steel scrap from the United States dur-
ing Jan-Apr 2023 increased 69% year-
on-year to 130 000 tonnes thanks to
improved demand from India, Mexico,
Taiwan and others.
However, clouds on the trade horizon
loom large for exporters of recycled
nickel, nickel alloys, and stainless steel.
In addition to anticipated revisions to
the EU Waste Shipment regulations,
other trade restrictions including the
potential expansion of commodities
covered under the Basel Convention

ing 15% during May alone and down
more than 30% for the year-to-date,
due to a variety of factors. The
International Nickel Study Group proj-
ects a global nickel supply surplus of
239 000 tonnes in 2023, up from its
previous forecast of a surplus of 171
000 tonnes this year. Rising primary
nickel production in Indonesia and the
expansion of refining capacity across
Asia continue to drive expectations for
market surpluses. Macquarie Research
estimates more than 150 000 tonnes of
new nickel refining capacity could be in
place in China and Indonesia by mid-
2024 and that total Indonesian nickel
production could surge to three million
tonnes per year by 2027.
Rising electric vehicle sales are expect-
ed to result in a significant ramp-up in
global nickel demand in the coming
years. Macquarie is forecasting that
nickel demand from the battery sector
will increase to 1.69 million tonnes by
2030. However, evolving battery chem-
istries are raising concerns about the
extent to which batteries will drive
increased nickel demand in the future.
Global electric vehicle sales are esti-
mated to have increased 36% year-on-
year during Jan-May 2023 but Chinese
production of lithium iron phosphate
batteries, which contain no nickel,
increased by around 50% over the
same period, Macquarie reports.

LACKLUSTRE DEMAND?
According to the latest forecasts from
worldstainless (formerly the
International Stainless Steel Forum),
growth in global stainless steel con-
sumption is expected to be flat (0.0%)

54

After trading above US$ 30 000 per
tonne in the first quarter of 2023, nick-
el prices at the London Metal
Exchange were briefly pressured below
US$ 20 000 per tonne late in the sec-
ond quarter. As with other commodi-
ties, concerns about elevated inflation
levels, slowing global growth, and frag-
ile economic conditions in China took a
toll. Edward Meir from the Marex
Group reported in late June that the
recent downturn in sentiment was

‘attributable to yet another set of drea-
ry macro numbers out of China, this
time showing that profits at the coun-
try’s industrial firms eroded by nearly
19% year-on-year over the Jan-May
period and hardly much of an improve-
ment over the 20.6% contraction seen
in January–April’.

PRICES REVERSE
Nickel prices have underperformed as
compared to other base metals, plung-

Nickel demand from the battery sector is forecasted to increase to 1.69 million tonnes by 2030.

54-55_manickelstainless.indd 54 05-07-2023 12:04