Commodities

Industrial Metals Monthly: Nickel’s price plunge shutters mines | articles

Indonesia’s supply boom has already forced several mines to close. Since the start of the year, the nickel market has seen a number of announcements regarding mine suspensions and closures from producers struggling amid low nickel prices.

In Australia, BHP Group said it would close part of its Kambalda concentrator after supplier Mincor Resources (a unit of Wyloo Metals) suspended nickel sulfide operations in the mining town. Panoramic Resources plans to halt its nickel sulfide operations in Savannah and First Quantum Minerals said it would scale back operations at its Ravensthorpe mine in Western Australia. The total suspended capacity in Australia accounts for around 1.7% of mined-nickel capacity in 2023.

In New Caledonia, Glencore announced it plans to suspend production and sell its stake in the 60,000 tonnes per year Koniambo ferronickel operations. Last year, the smelter produced around 27,000 tonnes. Two other nickel operations in New Caledonia, Doniambo ferronickel smelter and Prony Resources producing intermediate product, remain at risk from the plunge in nickel prices. These two operations produced around 75,000 tonnes of nickel in 2023. New Caledonia was the fourth-largest mined-nickel producer in 2023.

Despite the recent mine supply cuts, rising primary nickel output from Indonesia will keep the market in surplus this year, marking the third consecutive year of excess supply. Historically, market surpluses have been linked to LME deliverable/class 1 nickel but in 2023 and 2024, the surplus is mainly related to class 2 and nickel chemicals. Much of Indonesia’s output is of Class 2, lower purity material.

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