Nickel had been simmering in early 2020, with economists expecting demand to outstrip supply and thus have a positive effect on the market. Now economists are projecting an oversupply of around 89,000 tonnes, even with mining giants like Vale and Sumitomo Corp. cutting production forecasts and suspending operations.
On the LME, nickel’s cash average dropped from US$ 13,546 per tonne for January to US$ 11,868 for March, with an average for the first quarter as a whole of US$ 12,716. As for cobalt, LME cash averages of US$ 31,875 and US$ 29,568 per tonne were recorded for January and March, respectively; for the opening three months of the year combined, the average was US$ 31,477.
Superalloy demand was steady at the beginning of 2020, especially from the aerospace sector; news at the end of February that Boeing was looking to start production of the 737 MAX this May seemed a positive development at a time when the oil & gas and power generation sectors seemed sluggish. Shortly afterwards, however, COVID-19 destroyed the global economy within weeks, producing lockdowns in many countries. At the same time, the oil market has fallen sharply, with less than US$ 15 for a barrel of Brent Crude representing its lowest level since June 1999.
With such depressed markets and business sectors, the question now is at what point governments will be able to rebuild the global economy.
Siegfried Jacob Metallwerke GmbH & Co KG (DEU)