Monthly Metal Review

Nickel / Cobalt & Lithium (May 2019)

The ramp up on nickel pig iron (NPI) in Indonesia, combined with the disappointment over the lack of a trade deal between the US and China, are dampening sentiment for nickel, at a time when it is too early to get too excited in nickelís use in lithium-ion batteries. While the nickel market is expected to remain in a supply deficit this year, the deficits are shrinking in line with increased NPI output in Indonesia. According to Vale, nickel supply increased 11.6 percent in Q1 2019, relative to the same period in 2018. While NPI is picking up in Indonesia, the pro-spect of more environmental inspections in China may negatively impact Chinaís NPI output. The global refined nickel market was in a deficit of 17,200 tonnes in the first three months of 2019, which was down from a 45,100 tonne deficit in the same period last year, according to the International Nickel Study Group. With the market projected to be in a deficit and with exchange stocks falling, nickel prices are likely to remain supported overall. The sharp run up in prices on Friday may 24, was put down to short-covering by Chinese investors, but the fact prices gave back most of the gains the following day, suggests buyers are not feeling the need to restock yet. Fitch Ratings Inc, lowered its average price forecast for three-months nickel prices for 2019 to $13,250 per tonne, down from an earlier forecast of $14,500 per tonne. Like with other battery raw materials, while nickel prices may be falling, interest in future production remains strong - Mincor Resources has entered into a binding agreement to ac-quire Independence Groupís Long Nickel operation which has been on care and maintenance since June 2018. Producers are eying up potential projects to put them in prime position once EVs start to be come mainstream. The price rebound in cobalt has stalled and metal prices are edging lower again in the international markets. From a low price of $13.30 per pound in late-March, prices climbed to $16.35 in late-April, but have since slipped to $16, according to Fastmar-kets MB. Year to date, international cobalt metal price is down 40 percent. With the ramp-up in large scale production from Katan-ga and the Roan Tailings Reclamation projects, it seems the co-balt market will remain in a supply surplus and that is likely to weigh on prices for the rest of this year and next. Lower prices are, however, expected to curb artisanal production in the DRC, which should help alleviate some of the oversupply. The main oversupply is being seen in cobalt hydroxide, cobalt metal is tighter, which may mean the metal prices holds up better, while cobalt hydroxide prices get relatively cheaper as the hydroxide payables edge lower. there are some potential headwinds for cobaltís and nickelís use in lithium-ion batteries. First, EV sales in China in April only grew 18.1 percent, year-on-year, down from growth of 62 percent for the whole of 2018. Second, the introduction of less generous subsidies for NEVs in China. Overall, the outlook for NEV sales is strong and we expect NCM battery technology to increase market share, in the short term the NEV market may suffer some slowdown, in line with the broad-er vehicle market. The lithium market continues to look well supplied overall. With more of the spodumene concentrate from hard rock producers being processed in China and with Chinese domestic producers also increasing output, China has become less dependent on supply from South America. But, with less material being export-ed to China, there is now more competition in the seaborne market which is weighing on prices. SQM announced its average price in the first quarter dropped to $14,600 per tonne, which was down from $15,910 per tonne in the fourth quarter, a drop of 8.2%, while Orocobreís average price over the same period dropped 10.8 percent. With supply on the increase and prices weaker, some long-standing producers have announced measures that will help regulate supply; Chilean producer SQM announced it will produce 60,000 tonnes in 2019, but sell between 45,000 and 50,000 tonnes, and would therefore stockpile between 10,000-15,000 tonnes. Albemarle announced that it will only sell spodumene from Wodgina when there was demand for it. While the market may be facing oversupply in the short-term, M&A activity continued to show confidence in the outlook. Wesfarm-ers Ltd put in a bid for the outstanding shares in Kidman Re-sources , which valued the company at a 47% premium to the market price. In addition, Ganfeng Lithium is looking to buy a 30 percent stake in Bacanora Lithium. Further signs that few are letting the grass grow under their feet came from Volvoís an-nouncement that it is partnering with CATL, VW are to build their own battery factory, Umicore is looking to buy part of Free-port Cobalt ís Kokkola refinery and Sumitomo Metal Mining is looking to double cathode production.

Daily Prices

June 2019

Copper
Date(Fix.) ($/MT)
Average 5814.06
13-06-2019 5797.5
12-06-2019 5828.5
11-06-2019 5905
10-06-2019 5788
07-06-2019 5770
06-06-2019 5805
05-06-2019 5832.5
04-06-2019 5804
03-06-2019 5796
Silver
Date(Fix.) ($/OZ)
Average 14.80
13-06-2019 14.795
12-06-2019 14.79
11-06-2019 14.695
10-06-2019 14.745
07-06-2019 14.91
06-06-2019 14.955
05-06-2019 14.84
04-06-2019 14.72
03-06-2019 14.705
PM MEAN AM Gold
Date(Fix.) ($/OZ)
Average 1329.99
13-06-2019 1335.8
12-06-2019 1336.65
11-06-2019 1322.65
10-06-2019 1328.6
07-06-2019 1334.3
06-06-2019 1336.65
05-06-2019 1337.75
04-06-2019 1323.6
03-06-2019 1313.95
Date(Fix.) ($/OZ)
Average 1330.20
13-06-2019 1335.85
12-06-2019 1334.5
11-06-2019 1323.475
10-06-2019 1328.6
07-06-2019 1337.475
06-06-2019 1336.075
05-06-2019 1336.4
04-06-2019 1323.925
03-06-2019 1315.525
Date(Fix.) ($/OZ)
Average 1330.41
13-06-2019 1335.9
12-06-2019 1332.35
11-06-2019 1324.3
10-06-2019 1328.6
07-06-2019 1340.65
06-06-2019 1335.5
05-06-2019 1335.05
04-06-2019 1324.25
03-06-2019 1317.1
Lead
Date(Fix.) ($/MT)
Average 1882.94
13-06-2019 1903
12-06-2019 1918
11-06-2019 1949
10-06-2019 1888
07-06-2019 1837
06-06-2019 1945
05-06-2019 1881.5
04-06-2019 1834
03-06-2019 1791
Zinc
Date(Fix.) ($/MT)
Average 2627.78
13-06-2019 2604
12-06-2019 2640.5
11-06-2019 2670
10-06-2019 2620.5
07-06-2019 2621
06-06-2019 2637
05-06-2019 2605.5
04-06-2019 2636
03-06-2019 2615.5
Tin
Date(Fix.) ($/MT)
Average 19285.00
13-06-2019 19500
12-06-2019 19325
11-06-2019 19360
10-06-2019 19280
07-06-2019 19630
06-06-2019 19110
05-06-2019 19110
04-06-2019 19250
03-06-2019 19000
Nickel
Date(Fix.) ($/MT)
Average 11756.11
13-06-2019 11920
12-06-2019 11745
11-06-2019 11825
10-06-2019 11600
07-06-2019 11580
06-06-2019 11710
05-06-2019 11765
04-06-2019 11800
03-06-2019 11860
Cobalt
Date(Fix.) ($/MT)
Average 30000.00
13-06-2019 28000
12-06-2019 28000
11-06-2019 28000
10-06-2019 28000
07-06-2019 28000
06-06-2019 32500
05-06-2019 32500
04-06-2019 32500
03-06-2019 32500