column-is there an electric accelerator to falling nickel stocks? andy home
The opinion expressed here is the opinion of the columnist of Reuters. )
* Nickel market balance: tmsnrt.
Stock Exchange: tmsnrt.
On April 3, rs/2 GNIZXb of Andy\'s house in London (Reuters)-
Nickel stocks held on the London Metal Exchange (LME)warehouses MNI-
The stock market fell 46,344 tons, down 12.
6% in the first quarter.
This downward trend has continued for seven consecutive months, but has accelerated significantly since the beginning of January.
Cancel the activity, the metal is removed when the physical load is expected
Out, also rose.
54,294 tons were canceled last month, most of them in the port of Johor, Malaysia.
The ratio of cancellation to LME gross tonnage rose to more than 40% for the first time in two years.
Nickel shares registered on the Shanghai Futures Exchange (ShFE)
At the same time, there are 47,426 tons, and there is still a long way to go from the 2016 peaks above 100,000 tons.
The decline in exchange stocks seems to reinforce the market\'s move to a supply shortage.
But, citing analysts at Macquarie Bank, \"it is visible that inventories are being picked up faster than we expected, and there is a question mark on the availability of those inventories. ” (
European Metal & Mining, March 27, 2018)
Is there any other driver at work?
Ion battery supply chain starts to build nickel inventory first?
Chart on INSG\'s estimate of the balance of delicate markets: tmsnrt.
Rs/2Egk6hs graphics for LME and ShFE nickel inventory: tmsnrt.
International Nickel Research Group (rs/2 GNIZXb)INSG)
Global Computing 103,000-
Compared with last year, the ton gap in primary nickel production.
This is the second year in a row with a deficit of 42,000-
The ton gap in 2016.
But one that should be seen in the context of close to 500,000
Accumulated surplus of more than 2012 metric tons2015 period.
Until a few months ago, the impact of any deficit on the visible stock level, especially the stock level in the LME system, was negligible.
LME shares fell 5,000 tonnes in net during 2017.
However, the two accelerators have been launched.
The first from Vale, Brazil, the world\'s largest nickel producer, announced in December that it would reduce nickel production by 45,000 tons this year through care and maintenance programs.
The second one came from the cyclone that destroyed the Ambatovy nickel plant in Majima in January.
Operations resumed in February, but Sumitomo Corporation, a majority shareholder, warned,
Interest rates in the first half of this year.
It makes sense that the LME system may be used to fill the resulting supply chain Gap, but that does not mean the size of inventory extraction and cancellation in 2017.
In addition, in the wider nickel market, a surge in new supplies is taking shape and is expected not to be a famine.
Nickel production in Indonesia grew 74% last year to 345,000 tons.
Production in January was 37,000 tons, up 60% year on year.
The recovery in the country\'s nickel sector was due to last year\'s easing of previous bans on nickel exports and the establishment-
Domestic overall stainless steel capacity.
Indonesian iron ore flows to China again (NPI)
The producer of feed for the country\'s vast stainless steel industry remains the world\'s largest collective user of nickel.
China imports more than 1.
Indonesia\'s iron ore production in January and February was 9 million tons, almost zero compared with the same period last year, replacing the Philippines as the largest supplier.
China also continues to import large quantities of NPI from a new generation of operators building factories in Indonesia.
In addition, as Qingdao group built its own stainless steel factory in Indonesia, it now imports Indonesian nickel in the form of stainless steel products.
In fact, according to CRU data, due to Indonesia\'s import of 127,000 tons, China turned to a net importer of hot rolled stainless steel for the first time in December. (
\"CRU Insight\", February. 21, 2018)
The revival and reshaping of this oreNickel iron-
The stainless steel supply chain has been restricting the import of fine nickel in China.
Net imports of refined metals fell by 38% to 220,000 tons in 2017.
Production in the first two months of this year was 40,000 tons, the same as last year\'s low production, but still measured by historical standards.
It can be seen through the stainless steel prism that the sudden interest in the LME nickel stock does not seem to make much sense.
But these new Indonesian nickel is not good for those who need top grade nickel --
Materials sitting in the LME warehouse like this.
This includes battery manufacturers who need metal in the form of sulfuric acid to make lithium-ion batteries.
Economically speaking, sulfuric acid can only be made from the first type of material.
If you are in the battery business, the future supply prospects will be very troublesome.
Less than half of global nickel production last year was suitable for battery production.
According to S & P Global Market Intelligence, manufacturers.
The deposition of \"suitable\" type nickel is very small, so although the overall production of nickel ore will increase by 12% from 2017 to 2020, the mining supply suitable for battery manufacturing will only increase by 2% during this period(
\"Nickel supply for electric vehicles\", March 13, 2018)
The full impact of the electric vehicle revolution on nickel\'s broader market dynamics is widely regarded as the story of the future.
But the broader dynamics are those that are mainly used as alloys that melt into steel.
Specific dynamics of the battery-
In contrast, grade nickel may have changed with pre-emptive moves to ensure a tightening of product space.
Macquarie analysts seem to think so: \"Although (
Battery demand is a few years away from making sense, and inventory in the supply chain is supportive until such demand arises.
\"If the strategic inventory building is the third accelerator of the LME inventory decline, it means that the electric vehicle revolution is coming much earlier than expected on the LME.
This will also be a clear sign of tension between nickel as a stainless steel input and nickel as a lithium ion battery input.