LONDON (Reuters) – The knives may be out for the nickel market. Stainless steel knives specifically, together with stainless steel forks and spoons.
COVID-19 has hit just about every aspect of the global economy but the hospitality business is one of the worst affected.
A wave of restaurant closures in the developed world would generate a surge of unwanted cutlery. If 20% of restaurants closed, it would translate to around 80,000 tonnes of stainless steel scrap containing 24,000 tonnes of nickel, according to analysts at Citi.
That’s the equivalent of a medium-sized production plant such as Glencore’s Koniambo facility in New Caledonia. Citi’s calculation is based on the fact that kitchenware is still one of the main drivers of stainless steel consumption. And stainless steel remains the key driver of nickel demand despite the future promise of usage in lithium-ion batteries.
The focus on what happens to the restaurant sector in a post-coronavirus world is symptomatic of a shift in nickel market narrative from supply to demand disruption.