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Fitch commodity forecaster BMI Commodity Insights has dumped on nickel, cutting its 2024 price forecast by 10% to US$18,000\/t<\/strong> \u00a0<\/p>\n It gets no brighter for nickel, with another forecaster cutting its outlook for 2024 in the face of an Indonesian supply glut.<\/p>\n Fitch unit BMI Commodity Insights slashed its 2024 forecast from US$20,600\/t to US$20,000\/t at the end of last year only to find prices tumble south of those projections and fast.<\/p>\n As nickel hurtled towards US$16,000\/t as much as 40,000t of annualised nickel output was cut by Australian exporters in January \u2013 around a quarter of the nation\u2019s output, with further supply cuts flagged in New Caledonia and Colombia from Glencore and South32 (ASX:S32)<\/a>.<\/p>\n The real damage for market sentiment was done by BHP (ASX:BHP)<\/a>, which is investigating placing its 80,000tpa Nickel West division, operating virtually non-stop since 1966 under Western Mining Corporation, on care and maintenance.<\/p>\n Thanks to inflation and capital costs needed to retool the business \u2013 made core just a few years ago after years on the chopping block as its customer base shifted from stainless steel to the ESG friendly EV battery sector \u2013 its breakeven is now around US$20,000\/t. The business lost US$200m in the December half and fuelled a profit-snatching US$2.5b impairment.<\/p>\n BMI has now chopped its forecast for the battery metal from US$20,000\/t to US$18,000\/t for 2024. Prices briefly rose above that level amid a slowdown in mine approvals in Indonesia and surprisingly high stainless steel production in China which prompted Macquarie to say it could wind up in a surprise deficit this year.<\/p>\n But Fitch sees a hefty surplus still, with China\u2019s subdued economy and the digestion by the market of announced production cuts sending spot prices back to US$17,339\/t.<\/p>\n \u201cWe expect the nickel market to remain in surplus in 2024, with the balance hovering around 263kt, amid a significant rise in supply from leading producer Indonesia while a subdued global economic outlook presents downside risks to demand,\u201d he said.<\/p>\n \u201cBeyond that, we now see the market remaining in surplus throughout our forecast period, despite booming demand for nickel from the electric vehicle (EV) battery industry driving up nickel consumption, as Indonesia\u2019s production growth continues to surge.<\/p>\n \u201cIndonesian supply has saturated the global market and led to a significant increase in global nickel supply, with production expected to jump from 2.4Mt in 2019 to 4.3Mt in 2024.\u201d<\/p>\n \u00a0<\/p>\n BMI thinks Indonesia will keep that supremacy long-term.<\/p>\n \u201cIndonesia is now emerged as the leading producer of refined nickel globally thanks to domestic and foreign firms rapidly expanding the country\u2019s nickel refining capacity,\u201d its analysts said.<\/p>\n \u201cWe anticipate that Indonesia will sustain its position as the leading refined nickel producer over the forecast period 2024-2033, with production projected to increase from 1.7Mt in 2024 to 3.8Mt in 2033.\u201d<\/p>\n By 2033, Fitch says Indonesia and China will account for 68% of global nickel output, but flagged that rising environmental focus around Indonickel operators could limit growth.<\/p>\n The outlier on the ASX is Nickel Industries (ASX:NIC)<\/a>, which has become one of the world\u2019s largest purveyours of nickel tonnes by partnering in Indonesia with Chinese stainless steel giant and processing innovator Tsingshan.<\/p>\n This week it announced plans to double its share in the Excelsior HPAL project in Indonesia. It will eventually own 55% of the site, the first battery-grade nickel plant Nickel Industries will operate.<\/p>\n It has previously converted nickel pig iron to nickel matte to access the electric vehicle market.<\/p>\n \u00a0<\/p>\n Like the cat on the poster Sayona Mining (ASX:SYA)<\/a> continues to hang in there, saying an operational review supports its case to continue ramping up its North American Lithium mine in Quebec to full scale.<\/p>\n Owned 75% by Sayona (25% Piedmont Lithium (ASX:PLL)<\/a>), the operator intends to reduce unit costs by the end of 2024.<\/p>\n It announced the operational review at the end of January, making 14 staff redundant in Quebec.<\/p>\n Unit operating costs in the December quarter came in at $1397\/dmt, around $450\/dmt higher than average selling prices as its cash balance fell by 32% to $158m.<\/p>\n But that\u2019s not enough to prompt a mothball decision.<\/p>\n Canada\u2019s big chill led to more downtime than expected, with the NAL mill out of action for 27% of the March quarter, but Sayona said recoveries were improving, hitting 62% YTD.<\/p>\n It produced 24,740t of ~5.45% Li2O spodumene concentrate through the first two months of the year.<\/p>\n Sayona said costs of $1286\/dmt (US$839\/dmt) seen in the December half were expected to remain stable, with production increases key to bring them down.<\/p>\n \u201cThroughout this process, a key consideration was the direct impact on our dedicated workforce and host communities. This review has also validated our approach to continue to assess capital improvement initiatives that will increase production or lower unit operating costs,\u201d interim CEO James Brown said.<\/p>\n \u201cLooking forward, we will regularly evaluate NAL operations in the ordinary course of business based on prevailing market conditions and the ability to achieve our operating cost targets.<\/p>\n \u201cWe are confident that this approach to considering alternatives and maintaining optionality will enable Sayona to maximise value for shareholders ahead of an anticipated recovery in the lithium market.\u201d<\/p>\n Down 40% YTD, Sayona was up over 10.5% by 3pm AEDT today.<\/p>\n \u00a0<\/p>\n <\/span>\u00a0<\/p>\n The broader materials market was up 0.2% despite a rough day for iron ore producers, with bullish moves in battery and base metals sending producers like South32 (ASX:S32)<\/a>, Lynas (ASX:LYC) <\/a>and IGO (ASX:IGO)<\/a> higher.<\/p>\n \u00a0<\/p>\n <\/span>\u00a0 The post Monsters of Rock: Another forecaster takes a dump on nickel<\/a> appeared first on Stockhead<\/a>.<\/p>","protected":false},"excerpt":{"rendered":"
\nSayona Mining decides to keep going, aiming to bring down costs at its North American Lithium operation Canada by growing production<\/strong>
\nMiners up slightly as battery and base metals rise<\/strong><\/p>\nIndonesian growth impressive<\/h2>\n
Sayona vows to keep on trucking<\/h2>\n
Sayona Mining (ASX:SYA) share price today<\/h2>\n\n
Monstars share price today<\/h2>\n\n
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