MELBOURNE/SYDNEY – Global nickel miners are coming under renewed pressure to cut costs or close capacity as a flood of cheap ore pushes prices to one-year lows, with analysts seeing little prospect of recovery.
Indonesia and the Philippines are ramping up shipments of nickel ore after Indonesia relaxed an ore export ban earlier this year and a hardline Filipino environmentalist was ousted from the country’s mining ministry. Nickel ore is popular as a cheaper alternative to refined metal for China’s vast steel mills, which use the metal to add strength to stainless steel.
The renewed supply comes as the market is already struggling with softening demand and high stocks, leading a slew of banks to slash their forecasts despite prices having already fallen 60 percent since mid-2014 80 percent from their 2007 peak.
Citi recently told clients that for the first time in 10 years it saw little chance of a rally in the short, medium or long term. “Miners have been holding on as long as they can. They will be close to running out of wiggle room in terms of cutting costs,” said Mark Pervan at consultancy AME Group in Sydney.
“We need to see some reasonably sized refined capacity cutbacks to restore prices and confidence back to the market.”
For the rest of this article, click here: https://www.reuters.com/article/us-nickel-market-supply-idUSKBN18Y0K2