Quarterly Report – July 2019

On the LME, cash nickel began the second quarter at US$ 13,150 per tonne and ended it at US$ 12,660, averaging US$ 12,250 for the period. The market was wholly focused on the on/off trade war between the USA and China.

Towards the end of the second quarter, stainless steel manufacturing started to slow whereas superalloy demand is strong and was consistent throughout the three-month period, with signs for third-quarter demand looking promising. Nickel has even been booming in recent days after signs of the Federal Reserve dropping interest rates more than expected.

As for cobalt, the LME cash price began the second quarter at US$ 30,000 per tonne and made significant early gains before ending the period at US$ 25,600, giving an average of US$ 31,470. The decline reflects news that the electric vehicle market is steering towards a higher nickel ratio for batteries and a reduction in the amount of cobalt used.

There were no major metal movers in the second quarter affecting superalloy pricing, but with China’s growth hitting a 27-year low as GDP dropped from 6.4% to 6.2%, all eyes are still on the US/China trade talks.

The expectation is that the Eurozone economy slowed slightly in the second quarter, with support from domestic demand. Again, growth in Europe could be significantly affected if, as it has suggested, the USA decides to introduce car tariffs on Europe and Japan.