March 25, 2015

Analysts predict that a nickel deficit might take place in 2015. Albanian Minerals president and CEO Sahit Muja commented that a sharp fall on nickel output can be expected in 2015 due to depletion of Indonesian ore reserves. Haywood Securities mining analyst Stefan Ioannou backed this claim up in an interview with The Mining Report, saying that the Philippines was also considering an ore export ban following Indonesia’s lead. China’s nickel ore stockpiles in its major ports also slowly declined, falling by 82,000 tons in early November, according to Shanghai Metals Market.

The same news filled the nickel industry at 2013’s Q4. Indonesia, the top exporter of nickel ore to China’s booming nickel pig iron (NPI) market, unexpectedly banned all exports of unprocessed minerals including nickel ore. Nickel prices soared together with the demand at the London Metal Exchange (LME), going up by as much as 50 percent according to Daily Mail.

But the short-lived and hyped-up bull market dipped to bearish sentiments when the Philippines, China’s second biggest source of nickel ore after Indonesia, stepped up the production and export of nickel, stabilizing the nickel reserves in China’s major ports.

The Qingdao scandal in one of China’s ports also contributed to the rising nickel supply as previously off-market nickel stocks made their way to LME, creating a surplus. Nickel’s price plummeted to as low as $14,960 per ton in October—a five-year low for this otherwise lucrative investment.

Now that the worst is over and nickel has slightly recovered, analysts claim that it is already poised to enter the bull market this 2015. According to Sherritt International CEO David Pathe, “The metal is going to move several years of surpluses to probably a few years of supply deficits on longer term supply and demand fundamentals.”