Singapore 28/04/2016 - The International Nickel Study Group (INSG) has projected a 49,000-tonne deficit in the nickel market in 2016, an increase from its October forecast of a 23,000-tonne deficit for this year.
World primary nickel production is forecasted at 1.913 million tonnes in 2016, down 3.5 percent from output of 1.983 million tonnes in 2015, according to INSG’s statement on Tuesday. Production last year had fallen a slight 0.3 percent compared to 2014.
Chinese nickel pig iron (NPI) production had continued to decline in 2015 due to low nickel prices and the effect of the Indonesia ban on nickel ore exports since January 2014. A further decline in NPI is expected this year due to lower availability of nickel ore from the Philippines, though NPI production in Indonesia will continue to increase this year due to new project ramp-ups, it said.
INSG sees world primary nickel usage increasing by around 3.8 percent to 1.962 million tonnes in 2016, after rising a slight 0.8 percent to 1.89 million tonnes in 2015.
Despite the challenging economic environment world nickel usage is expected to grow in 2016 due to the increase in production of the austenitic stainless steel grades in all main markets, it said.
World stainless steel melting production had reached 41.5 million tonnes in 2015, a 0.3-percent reduction year-on-year, according to the International Stainless Steel Forum (ISSF). Reduced economic activity worldwide has had a negative impact on the stainless steel market with production in China recording a 0.6-percent decline last year after achieving a 21-percent annual growth rate in 2005-2014, INSG noted.
In the non-stainless steel sectors, primary nickel demand will maintain a positive trend in the aerospace industry and in the battery sector, it added.
INSG noted that there is a degree of uncertainty in the production figures due to uncertainty over Chinese NPI production. The estimates also do not include any general adjustment factor for possible production disruptions.