Quarterly Report – May 2021

As global economies try to shake off the effects of COVID and with vaccination programmes in full swing in most major countries, LME nickel has been having its own ups and downs with the cash average climbing from US$ 13,086 per tonne in January to US$ 13,386 in February before slipping to US$ 11,870 in March, giving an average for the quarter of US$ 12,780. This price plunge is explained to an extent by the announcement from Tsingshan that it would cover the demand for nickel matte for the Chinese electric vehicle battery industry.

Stainless markets have been making gains, with Chinese production up 45% year on year and global production up 11% in the first quarter, which equates to a 7% increase in primary nickel consumption. However, conditions for superalloy manufacturers were still quite stagnant owing to receding Boeing and Airbus deliveries in the first two months of 2021. With air passengers still proving elusive owing to pandemic-related restrictions, US manufacturers are not expecting a real recovery in the aerospace sector before 2022, with 2024 identified for a return to pre-COVID manufacturing levels. There were some orders mainly coming from the oil & gas and IGT sectors.

Cobalt pushed higher in the first quarter on the back of large quantities already tied up in long-term agreements, buoyant demand from the battery industry and expectations of a further deficit for the year. The metal’s LME cash average soared from US$ 37,706 per tonne in January to US$ 47,170 in February and US$ 52,317 in March, yielding a first-quarter average of US$ 45,731. Cobalt pricing has already made year-to-date gains of around 42%.