MOSCOW, April 7 (Reuters) – Norilsk Nickel, the world’s biggest producer of nickel and palladium, sees nickel prices recovering this year, it said on Monday after reporting a 64 percent drop in net profits due to write-offs.
The Russian firm, part owned by Chief Executive Vladimir Potanin and aluminium giant Rusal, had to trim spending last year and focus on its lucrative Soviet-era operations in Russia’s far north to cope with weak prices for its key metals.
“Last year was a challenging and volatile year in commodity markets with prices for the majority of metals in the Norilsk Nickel portfolio declining that had a clear impact on our top-line performance,” Potanin said in a statement.
The management is cautiously positive on 2014 with improving commodity prices in the beginning of the year but is also concerned over a deteriorating emerging market risk appetite in the global investment community, he added. Norilsk has not been hit by the political tension over Ukraine so far, but all Russian companies would suffer should the situation escalate, its deputy chief executive, Andrei Bougrov, said last week.
Norilsk said on Monday it expected the nickel price to continue to recover in 2014 and 2015 as an export ban on cheap nickel ore by top producer Indonesia takes hold.
“There are increasing indications that the ban on the export of nickel ore from Indonesia will be sustained, which leads us to expect the nickel market to be balanced in 2014, but developing a sizeable deficit in 2015,” the company added.
Norilsk’s view contradicts an estimate from the Lisbon-based International Nickel Study Group (INSG), which expects the global nickel surplus to shrink to about 50,000 tonnes this year from last year’s 170,000 tonnes on stronger demand and the export ban in Indonesia.
For the rest of this article, click here: http://www.reuters.com/article/2014/04/07/russia-norilsk-idUSL6N0MZ1MD20140407