Post on 25-Mar-2022
1
2
Economic Scenario
7.98.5
5.2 5.5
6.4
7.48.0 8.3
7.0
6.1
5.0
7.98.5
5.2 5.5
6.4
7.48.0 8.3
7.0
6.1
5.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
9.0
10.0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
In %
2.20% 4.60%
-18.30%
-57.60%
-33.90%
-15.80%-10.40%
-70.0%
-60.0%
-50.0%
-40.0%
-30.0%
-20.0%
-10.0%
0.0%
10.0%JAN'20 FEB'20 MAR'20 APR'20 MAY'20 JUN'20 JUL'20
-23.92-22.1
-18.9-17.1
-11.9
-30
-25
-20
-15
-10
-5
0
INDIA UK FRANCE ITALY GERMANY
India - Annual GDP Growth rate (%)
-30
-20
-10
0
10
20
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1
2015 2016 2017 2018 2019 2020
In %
India - QOQ Growth rate (%)
Industrial Output (%) Drop in GDP Growth Quarter I (%)
In %
In %
Stainless Steel, The Fastest Growing Metal
3
CAGR from 1980 onwards
5.33%
3.71%
2.58%
2.49%
2.05%
2.00%
0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00%
STAINLESS STEEL
ALUMINIUM
COPPER
CARBON STEEL
ZINC
LEAD
Average – 2.56%
Region wise Stainless Steel Production Trends (In ‘000 MTPA)
4
CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 CY 2019CY 2019
(H1)CY 2020
(H1)
Asia 21497 22937 24926 28493 31097 31167 34335 37352 40706 42911 20754 18965
Europe 7488 7559 7458 7142 7243 7153 7274 7374 7383 6797 3739 3141
Africa 478 444 505 499 481 529 587 577 550 471 275 180
America 407 404 390 423 425 401 451 411 426 331 180 152
CIS 218 249 217 195 174 165 162 167 164 170 84 71
0
10000
20000
30000
40000
50000
60000
Pro
du
ctio
nCIS America Africa Europe Asia
~ 8.6% Drop from Previous
Year H1
CAGR Growth @ 5.96%
Top SS Producers wise Production Trends (In ‘000 MTPA)
5
CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 CY 2019CY 2020
(H1)
China 12415 14091 16087 19448 21666 21564 24247 26149 27563 30612 13517
India 2120 2271 2470 2680 2973 3209 3436 3590 4022 3723 1502
Japan 3427 3256 3132 3175 3331 3062 3093 3168 3244 2963 1289
Korea (S.) 2012 2116 2131 2109 2018 2224 2273 2390 2415 2237 1149
Indonesia 0 0 0 0 0 0 23 680 2290 2378 1091
Taiwan 1523 1203 1106 1081 1108 1108 1263 1376 1172 997 416
Rest of World 8591 8657 8569 8259 8323 8248 8474 8529 8524 7769 3544
0
10000
20000
30000
40000
50000
Rest of World Taiwan Indonesia Korea (S.) Japan India China
Incr
easi
ng
urb
aniz
atio
n I
n A
sian
Cou
ntr
ies
lead
ing
to
CA
GR
of
ore
than
8%
Gro
wth
Tre
nd
lik
ely
to
Co
nti
nu
e…
Country wise SS Production Trends (In ‘000 MTPA)
6
30612
3723 2963 2237 2378997
7769
0
5000
10000
15000
20000
25000
30000
35000
CHINA INDIA JAPAN KOREA (S.) INDONESIA TAIWAN REST OF WORLD
CY 2010 CY 2018 CY 2019 CY 2020 (H1)
Indonesia adding most from newly installed Capacities
Indian Stainless Steel Production Trends (In ‘000 MTPA)
7
843
34363590
4022
3723
1502
3755
0
500
1000
1500
2000
2500
3000
3500
4000
4500
Indian Stainless Steel Manufacturing has grown at a CAG Rate of more than 8% from 2000 onwards
Ex
pected
Indian Melt Production & Mill Consumption (In ‘000 MTPA)
8
3.4363.59
4.022
3.723
2.947 2.944
3.239
3.55
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
CY 2016 CY 2017 CY 2018 CY 2019
Melt Shop Production Consumption
9
Stainless Steel End-Use: World Vs India
35%
23%
18%
10%
14%
63%13%
6%
9%
9%Consumer Goods
Process Industry
Architecture, Building& Construction
Automobile &Railway
Others
Per Capita Consumption :World Avg. - 5.6 KgChina - 14.1 KgIndia - 2.5 Kg
Lesser Per Capita Stainless Steel Consumption opens wide room of opportunity for Stainless Steel Industry Growth
World(Outer Circle)
India(Inner Circle)
10
Current Trade Remedies / Ongoing Investigations
Anti Dumping duties*Product Countries against whom initiated Duty range in USD/MT
Hot Rolled Flat Products of Stainless Steel of ASTM Grade 304 (width upto 1650mm)
China, Korea & Malaysia 180- 316
CRSS of all widthsChina PR, Korea, European Union, South Africa, Taiwan, (Chinese Taipei), Japan, Thailand and USA.
ADD as percentage of the landed value of imports ranging from 5.39% to 57.39%
Countervailing DutyProduct Countries against whom initiated Duty range in USD/MT
Imports of stainless steel flat products China 18.95% (valid until 2022)
*Both the ADD measures have been extended upto Dec 2020 owing to the COVID pandemic
Cases under investigation Trade remedial measure Product range Countries
Anti Dumping Duty (ADD) Stainless steel flat products
China PR, Korea RP, European Union, Japan, Taiwan, Indonesia, USA, Thailand, South Africa, UAE, Hong Kong, Singapore, Mexico, Vietnam and Malaysia
Countervailing Duty (CVD) Stainless steel flat products Indonesia
11
Country / Region wise Scrap Ratio (In ‘000 Metric Tons)
0
200
400
600
800
1000
1200
1400
CHINA INDIA JAPAN INDONESIA EUROPE N AMERICA S KOREA TAIWAN
Primary SecondaryN
ick
el C
on
sum
pti
on
in
Pri
ma
ry
& S
eco
nd
ary
fo
rm
China being the largest producer of primary Ni Viz. Pure Ni, Fe Ni, NPI etc., Mostly uses primary source of
Nickel for SS Production
Scrap Ratio for Top SS Producing Countries
CountryPrimary Ni
(Pure Ni, Fe Ni & NPI)Secondary Ni
(Scrap)
N America 21% 79%
India 33% 67%
Europe 34% 66%
Japan 47% 53%
S Korea 53% 47%
Taiwan 59% 41%
China 78% 22%
Indonesia 94% 6%
RoW 61% 39%
1212
I
13
MARKET LEADERSHIP THROUGH INNOVATIVE
TECHNOLOGY AND STATE OF ART PRODUCTION FACILITIES
RANKED AMONGST THE TOP TEN STAINLESS STEEL
COMPANIES IN THE WORLD WITH THE CAPACITY OF
1.9 MILLION TONNES
OVER 14,000 EMPLOYEES WORLDWIDE.
4 MANUFACTURING LOCATIONS, 25+ SALES
OFFICES,6 SERVICE CENTERS
INDIA’S LARGEST INTEGRATED STAINLESS STEEL MANUFACTURER
A GLIMPSE
14
OVERSEAS NETWORK
I n t e r n a t i o n a l Sa l e s O f f i c e s
M a n u f a c t u r i n g Fa c i l i t i e s
USA
Indonesia
Belgium
Spain
South Korea
Russia
Vietnam
UAE
Brazil
Singapore
Taiwan
Italy
UK
15
DOMESTIC NETWORK
16
J I N D A L S TA I N L E S S
LT D ( J S L )
J I N D A L S TA I N L E S S H I S A R LT D
( J S H L )
GROUP STRUCTURE
I
I
I
I
17
J I N D A L S T A I N L E S S ( H I S A R ) L T D ( J S H L ) , H I S A R , H A R Y A N A .
C A P A C I T Y – 8 0 0 , 0 0 0 T P A
J I N D A L S T A I N L E S S L T D ( J S L ) , J A J P U R , O D I S H A .
C A P A C I T Y – 1 , 1 0 0 , 0 0 0 T P A
TOTAL CAPACITY – 1,900,000 TPA
I
I
18
( T o n n e s / A n n u
m )
800,000 1,100,000 -
720,000 - -
300,000 1,600,000 -
60,000 96,000 -
375,000 600,000 150,000
30,000 - -
- 100,000 -
FACILITIES & CAPACITIES
19
Jindal’s share in Indian Scrap Imports
10%
57%
90%
43%
0%
20%
40%
60%
80%
100%
MS SCRAP SS SCRAP
Jindal Stainless Others
Jindal Stainless are the Largest Single Buyer for SteelScrap in both MS and SS Scrap forms.
With YoY increasing levels of production, we hope toacquire even larger shares in Scrap Imports to India!
We share 57% Market share in Directly/Indirect
Sourced SS Scrap
Total Import Quantity to India 6 Mn MT Yearly
Total Import Quantity to India 1 Mn MT Yearly
20
T h a n k y o u f o r y o u r a t t e n t i o n !
S T A I N L E S S S T E E L S C R A P U P D A T E
Sean Davidson, CEO, Davis Index
ISRI15 Sept 2020
D I S C L A I M E RDavis Index Private Limited (Davis) makes no representations or warranties or other assurance, express or implied, about the accuracy or suitability of any information in this presentation and related materials distributed at or in connection with this presentation.
The information or opinions contained in this presentation are provided on an “as is” basis without any warranty, condition or other representation as to its accuracy, completeness, or suitability for any particular purpose and shall not confer rights or remedies upon the recipients of this presentation or any other person. Data and information contained in the presentation come from a variety of sources, some of which are third parties outside Davis’ control and some of which may not have been verified.
All analysis and opinions, data, projections, outlooks and forecasts provided may be based on assumptions that are not correct or which change, being dependent upon fundamentals and other factors and events subject to change and uncertainty; future results or values could be materially different from any forecast or estimates described in the presentation.
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01 02 03H
EL
LO
DO
ME
ST
IC
EX
PO
RT
S
A quick introduction to
Davis Index
Market update on US and
Canada
Update and outlook on India,
Taiwan, China
04
SU
MM
AR
Y
Recap of key market
developments
D A V I S I N D E X01 The world’s leading provider of scrap and
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I N D E X P R O C E S S
D a t a M i n i n g
D a t a R a t i o n a l i z a t i o n
1D a t a p r o c e s s i n g
2
3
(Volume-weighted)D a t a I n d e x a t i o n
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M A R K E T C O V E R A G E
Aluminium
Primary India, USA
Scrap domestic India, USA
Scrap import China, India
Scrap export USA
Secondary alloy China, India, Japan, USA
Stainless steel
Scrap import India, Taiwan
Scrap domestic USA
Copper/brass
Primary India, USA
Scrap domestic India, USA
Scrap import China, India, Pakistan
Scrap export USA
Lead
Primary India, USA
Scrap domestic India, USA
Ingot India Zinc
Primary India, USA
Alloy India, USA
Scrap import India
Scrap domestic India, USA
Steel
Billet domestic Bangladesh, India, Pakistan
Rebar domestic Bangladesh, India, Pakistan
Ferrous scrap
Domestic Bulk imports Bulk exports Container import
Bangladesh Bangladesh Belgium BangladeshCanadaChina Ecuador Baltic Sea India
Germany Egypt Black Sea Indonesia
India Greece Germany Pakistan
Japan India Netherlands South Korea
Malaysia Indonesia UK Taiwan
Mexico Kuwait USA Vietnam
Pakistan Malaysia
South Korea Mexico Dock prices Container export
Spain Pakistan Belgium Belgium
Taiwan Peru Netherlands Japan
Thailand Saudi Arabia Russia Netherlands
Turkey South Korea UK UK
UK Taiwan USA USA
USA Turkey
Vietnam
Feedstocks
Basic Pig Iron
Black Sea
Italy
US
HBI
USA
NPI
USA
Sponge iron
India
Freight
Container Bulk
Bangladesh Brazil-US
China Europe-Turkey
India Turkey-US
Indonesia UK-Turkey
Malaysia US-Bangladesh
Pakistan US-Korea
South Korea US-Turkey
Taiwan
Thailand
Vietnam
D O M E S T I C02 A look at recent market developments in
the US and Canada
U S A : S T A I N L E S S S T E E L S C R A P
0.000
1.000
2.000
3.000
4.000
5.000
6.000
7.000
8.000
0.400
0.450
0.500
0.550
0.600
0.650
0.700
0.750
0.800
6-Ja
n-20
14-J
an-2
023
-Jan
-20
3-Fe
b-20
11-F
eb-2
019
-Feb
-20
27-F
eb-2
06-
Mar
-20
16-M
ar-2
024
-Mar
-20
1-Ap
r-20
9-Ap
r-20
17-A
pr-2
027
-Apr
-20
5-M
ay-2
013
-May
-20
21-M
ay-2
01-
Jun-
209-
Jun-
2017
-Jun
-20
29-J
un-2
08-
Jul-2
016
-Jul
-20
24-J
ul-2
04-
Aug-
2012
-Aug
-20
20-A
ug-2
028
-Aug
-20
8-Se
p-20
USD/lbUSD/
lb
316 solids del US processor 316 turnings del US processor LME Nickel cash official (secondary axis)
U S A : S T A I N L E S S S T E E L S C R A P
0.000
0.500
1.000
1.500
2.000
2.500
2-Ja
n-19
23-J
an-1
9
13-F
eb-1
9
6-M
ar-1
9
27-M
ar-1
9
17-A
pr-1
9
8-M
ay-1
9
29-M
ay-1
9
19-J
un-1
9
10-J
ul-1
9
31-J
ul-1
9
21-A
ug-1
9
11-S
ep-1
9
2-O
ct-1
9
23-O
ct-1
9
13-N
ov-1
9
4-De
c-19
25-D
ec-1
9
22-J
an-2
0
12-F
eb-2
0
4-M
ar-2
0
25-M
ar-2
0
15-A
pr-2
0
6-M
ay-2
0
27-M
ay-2
0
17-J
un-2
0
8-Ju
l-20
5-Au
g-20
26-A
ug-2
0
USD/
lb
201 solids del US processor 301 solids del US processor 309 solids del US processor
310 solids del US processor 330 solids del US processor 409/410 solids del US processor
430 solids del US processor
U S A : I N C O N E L S C R A P
1.50
2.00
2.50
3.00
3.50
4.00
4.50US
D/lb
Inconel 600 vaccum melted del US processor yard Inconel 601 vaccum melted del US processor yard
Inconel 617 vaccum melted del US processor yard Inconel 625 vaccum melted del US processor yard
Inconel 718 vaccum melted del US processor yard
U S A : C O L L E C T I O N P R I C E S
0.150
0.170
0.190
0.210
0.230
0.250
0.270
0.290
0.310
0.330
0.350
4-Ja
n-19
25-J
an-1
915
-Feb
-19
8-M
ar-1
929
-Mar
-19
22-A
pr-1
910
-May
-19
31-M
ay-1
921
-Jun
-19
12-J
ul-1
92-
Aug-
1923
-Aug
-19
13-S
ep-1
94-
Oct
-19
25-O
ct-1
915
-Nov
-19
6-De
c-19
27-D
ec-1
917
-Jan
-20
7-Fe
b-20
28-F
eb-2
020
-Mar
-20
10-A
pr-2
05-
May
-20
26-M
ay-2
016
-Jun
-20
7-Ju
l-20
28-J
ul-2
018
-Aug
-20
8-Se
p-20
USD/
lb
304 (18-8) solids del New York yard 304 (18-8) solids del Boston yard 304 (18-8) solids del Philadelphia yard
322Dallas
295New Orleans
320Houston/San Antonio
294Quad Cities
303St. Louis
280
280Philadelphia
311
Pittsburgh
285
Cleveland/Youngstown
Buffalo
318NE Arkansas
313Birmingham
275Cincinnati/Indianapolis
304Carolinas
Detroit283Chicago
U S A : # 1 B U S H E L I N G D E L C O N S U M E R
Prices are in USD/gt, 08 September 2020
270
Dallas (Consumer)
New Orleans (Dealer, Export, Pig Iron Import)
Houston/San Antonio (Consumer)
Quad Cities (Consumer)
St. Louis (Dealer)
Philadelphia (Export, Consumer)
Cleveland, Pittsburgh (Consumer)
Buffalo (Dealer)
NE Arkansas (Consumer)
Birmingham (Consumer)
Montreal (Consumer, Export)
Carolinas (Consumer)
Detroit (Consumer)
Chicago (Consumer)
Houston (Export)
Toronto-Ontario (Consumer)
Boston, Providence (Export)
New York (Export)
Tampa (Export)
Baltimore (Export)
Seattle-Portland (Export)
San Francisco-Oakland (Export)
Los Angeles (Export)
U S C O V E R A G E
Weekly assessment market Monthly assessment marketDelivered consumer buying prices, with 10 years of price history in most markets.
Bulk and containerized assessments, including freight, as well as export yard buying prices, with 10 years of price history. MAIN GRADES
ASSESSED1. #1 busheling2. Shredded 3. Shredder feed (export yards)
4. #1 HMS5. 5’ P&S6. Machine shop turnings
U S A : L O O K I N G A H E A D
• There is near-term optimism for September and October. Mills are building inventory ahead of an uncertain winter which is the key driver of nickel prices and scrap demand.
• Beyond October there is no consensus as the upcoming election and unknown extent of Covid-19 winter phases drives uncertainty.
• Analysts suggest that US stainless demand will drop by 18-25% in calendar 2020, recover by 10-15% in 2021, and return to pre-Covid levels in 2022.
• Real estate, automotive and medical equipment industries are expected to drive this recovery, with a rapid increase in the use of stainless in medical equipment negating the adverse impacts of a devasted restaurant/hospitality industry.
• Other major concerns are a growing nickel surplus, which several analysts feel will cross 100,000mt by the end of this year. The surplus was just over 30,000mt in the first half of the year.
P O L L
How long do you expect current US demand levels for stainless scrap to continue?
• 1 month
• 2 months
• 3 months
• 4 months
P O L L
Do you expect the outcome of the US presidential election to drive a stronger recovery for stainless steel in the next two years, or a weaker recovery?
• Stronger
• Weaker
E X P O R T S03
Developments in offshore markets
I n d i a : S t a i n l e s s s t e e l s c r a p
0200400600800
100012001400160018002000
USD
/mt
304 (18-8) solids cfr India port 316 solids cfr India port 430 solids cfr India port
I n d i a : Z u r i k
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
700
900
1100
1300
1500
1700
7-Ja
n-20
15-J
an-2
024
-Jan
-20
4-Fe
b-20
12-F
eb-2
020
-Feb
-20
28-F
eb-2
09-
Mar
-20
17-M
ar-2
025
-Mar
-20
2-Ap
r-20
10-A
pr-2
020
-Apr
-20
28-A
pr-2
06-
May
-20
14-M
ay-2
022
-May
-20
2-Ju
n-20
10-J
un-2
019
-Jun
-20
30-J
un-2
09-
Jul-2
017
-Jul
-20
27-J
ul-2
05-
Aug-
2013
-Aug
-20
21-A
ug-2
031
-Aug
-20
9-Se
p-20
USD/mtUS
D/m
t
Zurik 85/3 cfr India port 316 solids del US processor LME Nickel cash official (secondary axis)
S h r e d d a b l e s
235.00
245.00
255.00
265.00
275.00
285.00
295.00
305.00
315.00
325.00
335.00
780
830
880
930
980
1030
1080
1130
1180
7-Ja
n-20
15-J
an-2
024
-Jan
-20
4-Fe
b-20
12-F
eb-2
020
-Feb
-20
28-F
eb-2
09-
Mar
-20
17-M
ar-2
025
-Mar
-20
2-Ap
r-20
10-A
pr-2
020
-Apr
-20
28-A
pr-2
06-
May
-20
14-M
ay-2
022
-May
-20
2-Ju
n-20
10-J
un-2
019
-Jun
-20
30-J
un-2
09-
Jul-2
017
-Jul
-20
27-J
ul-2
05-
Aug-
2013
-Aug
-20
21-A
ug-2
031
-Aug
-20
9-Se
p-20
USD/
mt
Zurik 85/3 cfr India port Zorba 99/3 cif China port Shredded cfr India port
T a i w a n
900
1100
1300
1500
1700
1900
2100US
D/m
t
304 (18-8) solids cfr Taiwan port 316 solids cfr Taiwan port 316 solids cfr India port
P O L L
Which country do you prefer exporting to?
• South Korea
• Taiwan
• India
P O L L
Why?
• More efficient to trade with
• Always honors prices, rarely re-negs, lower claims
• Easier logistics and ports management
• Always pays the highest price
S U M M A R Y04
A quick recap
S U M M A R Y
• US and Asian markets expect a strong September and October.
• After that, it’s anyone’s guess!
Sean Davidsonsean@davisindex.com
NICKEL BACK TO PRE-PANDEMIC LEVELS –WHERE DO WE GO FROM HERE?
StoneX Financial Ltd
Natalie Scott-Gray
Senior Metals Analyst
Base MetalsEMEA & Asia
2
AGENDA
• Where Are We with Nickel Prices?
• What Are the Fundamentals Telling Us?
• Nickel Prices in a Post COVID-19 World?
3
WHERE ARE WE WITH NICKEL PRICES?
4
Nickel Prices – Back to Pre-Pandemic Levels,
But Have Been Knocked Off Pre-Pandemic Trajectory
10,000
11,000
12,000
13,000
14,000
15,000
16,000
17,000
18,000
Jan-19 Jul-19 Jan-20 Jul-20
$/t
Indonesia Export Ban Announced for January
2020
COVID-19
First Reports Pandemic 2019 2020E 2021E 2022E
Nickel $/t 14,556 17,100 17,132 17,252
% Change Y/Y 11% 17% 0.2% 1%
Q1 2020 Q2 2020 Current
Nickel $/t 12,765 12,319 15,195
% Change Y/Y 2.4% 0.2%
Average Annual Nickel Price Forecasts Pre COVID-19
Quarterly Nickel Price Actual
Source for chart: Bloomberg, Design: StoneX Source for tables: Bloomberg, Design: StoneX
Source for tables: Fastmarkets, Design: StoneX
5
The Macro Economic Environment for Commodities
Has Started to Improve
Weak U.S. Dollar Plays a Positive Role
90
92
94
96
98
100
102
104
140
150
160
170
180
190
200
Jan-19 Jul-19 Jan-20 Jul-20
Ind
ex
Ind
ex
BBG Base Metal 3M USD
Global PMIs Rebound
Global GDP’s to Bounce Back
Source for chart: Bloomberg, Design: StoneX
Source for chart: Bloomberg, Design: StoneX
This chart includes predictions/forecasts. Past performance may not be a
reliable guide to future performance.
Source for chart: Bloomberg, Design: StoneX
30
40
50
60
Dec-19 Feb-20 Apr-20 Jun-20 Aug-20
Ind
ex
Global USA China Eurozone
2018 2019 2020E 2021E
China 6.7 6.1 2.0 8.0
Eurozone 1.9 1.3 (8.0) 5.6
United States 3.0 2.2 (5.0) 3.7
World 3.6 2.9 (3.9) 5.1
Worldwide PMI Readings Show Global Improvement
European PMIs Stumble
Asian PMIs are a Mixed Bag
Global PMI Readings Are Expansionary
Source for charts: Bloomberg, Design: StoneX
Please note: China’s readings is based on Caixin General Manufacturing Purchasing Mangers’ Index
7
WHERE ARE WE WITH THE FUNDAMENTALS?
8
Supply - Mine Production Hit Worse Than Originally
Anticipated
Nickel Mine Production
0
200
400
600
800
2018Q1
2018Q3
2019Q1
2019Q3
2020Q1
2020Q3
00
0 t
ROW Indonesia Philippines
-20% -15% -10% -5% 0% 5% 10% 15%
Philippines
Indonesia
Other
Canada
Russia
Australia
New Caledonia
Brazil
Nickel Mine Production Q1-Q3 (by country) Nickel Mine Production Market Share (2019)
• Mine production reached its highest level on record in 2019 at 2.6Mt.
• 7% of total production was lost over the Q1-Q3 period on a Y/Y basis reaching its lowest level since 2018.
• The higher price point for nickel has helped to reduce price-related cutbacks.
*(10%)
*(7%)*(9%)
Source for charts: CRU International Ltd, Design: StoneX
9
Supply – Refined Nickel Production Supported By
Indonesian Capacity Additions
400
450
500
550
600
650
40
60
80
100
120
140
160
180
200
220
240
2018 Q1 2019 Q1 2020 Q1
00
0 t
00
0 t
Global Indonesia China
0%
20%
40%
60%
80%
2016 2017 2018 2019 2020
Indonesia China ROW
Refined Nickel Production Refined Production % Market Share
• Refined production has risen by 3% Y/Y over the Q1-Q3 to its highest level on record.
• Key driver behind growth comes from increasing Indonesian capacity additions, which offset losses in the China and the ROW.
*2%
*4%
*4%
Source for charts: CRU International Ltd, Design: StoneX
Please note: * Percentage Y/Y Change
10
Supply – Stocks Rise to Multi-Year Highs
400
450
500
550
600
650
700
750
Feb 2019 Jun 2019 Oct 2019 Feb 2020 Jun 2020
00
0 t
• Total nickel stocks at end-June reached their highest level since August 2018.
• Exchange stocks recorded the most volatility:
Total Global Stocks LME Versus SHFE Stocks
Source for charts: CRU International Ltd, Design: StoneX
50,000
90,000
130,000
170,000
210,000
250,000
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
Jan-19 Jul-19 Jan-20 Jul-20
tt
SHFE LME
LME SHFE
YTD Change 57% (11%)
11
Demand – Stainless Steel Production Has Suffered
Across the Board
10,500
11,000
11,500
12,000
12,500
13,000
13,500
14,000
2018 Q1 2019 Q1 2020 Q1
00
0 t
Global Quarterly Stainless Steel Production Q1-Q3 Production (% Change) by Region
• Stainless Steel production has fallen by 9% Y/Y over the Q1-Q3 to its lowest level since 2017.
• A rebound in Chinese production over Q2-Q3 has not been enough to offset losses in the ROW this year.
• A build up in Chinese stocks may indicate production is running ahead of demand.
*(9%)
*(11%)
*(7%)
-30%
-25%
-20%
-15%
-10%
-5%
0%
Asia NorthAmerica
Europe Central &South
America
Africa
Source for charts: CRU International Ltd, Design: StoneX
Please note: * Percentage Y/Y Change
12
Demand – The Battery Market Will Rebound Strongly
These charts include predictions/forecasts. Past performance may not be a
reliable guide to future performance.
Source for chart: BloombergBNEF, Design: StoneX
Passenger Electric Vehicle Sales
0
500
1,000
1,500
2,000
2,500
3,000
2015 2016 2017 2018 2019 2020E 2021F
00
0 t
*59%
*52%
*77%
*9%
*(18%)
*52%
Please note: * Percentage Q/Q Change
• Nickel demand from batteries is forecast to grow by 6% Y/Y in 2020.
• A strong rebound in demand for this sector will come from COVID-19 induced government led green policy.
Engine Type Gasoline Diesel Hybrid BEV
Demand Area Stainless Steel
Stainless Steel
Lithium-ion Batteries
Lithium-ion Batteries
Demand per Vehicle (kg)
2-4 2-4 5-15 30-110
Nickel Consumption by Engine Type
Source for chart: Norncikel, StoneX
13
WHERE DO WE GO FROM HERE?
0
20
40
60
80
100
120
2020 Pre-Pandemic 2020E
00
0 t
14
Nickel Market Flips into a Surplus Market in 2020
These charts include predictions/forecasts. Past performance may
not be a reliable guide to future performance.
Source for charts: Nornickel, BloombergNEF, StoneX
Annual Market Surplus / Deficit Balance 2020 Estimates Pre-Virus Versus Current Forecast for Annual Market Surplus
70,000t nickel surplus added
-200
-150
-100
-50
0
50
100
150
2016 2017 2018 2019 2020E
00
0 t
15
Price Projections to the Upside for Nickel Have Been
Delayed
These charts include predictions/forecasts. Past performance
may not be a reliable guide to future performance.
Source for chart: Bloomberg, Design: StoneX
Market Nickel Price Quarterly Forecasts
Market Mean Nickel Price Annual Forecasts
Q1 Q2 Q3E Q4E
2019 Price (S/t) 12,468 12,298 15,565 15,420
2020 Price ($/t) 12,765 12,319 12,992 13,534
Change (%) 2% 0.2% (16.5%) (12.2%)
2019 2020E 2021E
Price (S/t) 13,970 12,903 14,253
Change (%) 6% (8%) 10%
Source for table: Fastmarkets, Design: StoneX
Source for table: Fastmarkets, Design: StoneX
10,000
11,000
12,000
13,000
14,000
15,000
16,000
17,000
18,000
Jan-19 Jul-19 Jan-20 Jul-20
$/t
Indonesia Export Ban Announced for January
2020
COVID-19
First Reports Pandemic
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Disclaimer
Senior Metals AnalystBase Metals
Natalie Scott-Gray
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