The nickel market will hold a marginal deficit until 2021 after which the deficit is expected to expand again, Alex Khodov, principle nickel market analyst from Norilsk Nickel, said at Fastmarkets' 20th Asian Ferro-alloys conference in Hong Kong this week.
In the near term, the global nickel deficit will narrow due to nickel pig iron (NPI) production ramp-ups in China and Indonesia and the resumed export of nickel ores from the latter, according to Khodov. In January 2017, the Indonesian mining authority announced new legislation to relax a ban on nickel ore exports, which had been in place since 2014. After that, the exports of Indonesian nickel ores to China, the largest buyer for their materials, gradually picked up. Indonesia supplied over 15 million tonnes of nickel ore to China in 2018. The new mining legislation not only boosted the NPI production in China following increased shipments of feedstock to country, but also largely encouraged the development of NPI projects in Indonesia given Indonesian mining authorities' request for local miners to complete smelter projects within five...