Is a Nickel Surplus in the Cards?

Writing for The Australian, columnist Robin Bromby said that according to Commonwealth Bank of Australia (ASX:CBA) analysts, a nickel surplus may be in store for 2015-2016. That may come as a surprise for some given nickel’s positive performance earlier this year.

As quoted in the market news:

Until Indonesia earlier this year imposed an export ban on unprocessed minerals, that country was the key producer and exporter of high-grade nickel ore (up to 25 per cent of nickel supply), a vital feedstock for China’s nickel pig iron sector. China has been striving to overcome this by ­importing more ore from The Philippines, developing nickel pig iron plants in Indonesia, importing ferronickel from other ­countries while stainless steel producers (who account for about two-thirds of nickel demand) have changed the amounts of nickel in their end product.

CBA says, however, that markets may be underestimating the production to come from nickel projects outside China; 15 large projects, many laterite ones, are in various stages of ramp-up, with more metal coming on to the ­market each year from now on.

Click here to read the full report from The Australian.