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Nickel surplus shrinks dramatically – Stainless Espresso

The recent revision from the International Nickel Study Group (INSG) regarding the nickel surplus is significant. With a reduction of almost 55% in volume from their previous forecast, it suggests a tightening of the nickel market. This adjustment indicates that the surplus, particularly in class 2 and nickel chemicals, which dominated in 2023, has diminished considerably.

The forecast implies that the availability of class 1 nickel, traded on the London Metal Exchange (LME), is likely to remain constrained. The marginal increase in LME warehouse stocks since the start of 2024 is attributed to 2023 production and is anticipated to have reached its peak. This reinforces the notion that class 1 nickel may already be experiencing shortages.

However, it’s important to approach INSG forecasts cautiously. The organization’s funding sources could influence their objectivity and impartiality, potentially skewing their assessments. The oversight of distortions in the European stainless steel scrap market, particularly regarding price fixing, raises questions about the comprehensiveness of their reports.

This caution is underscored by the INSG’s past failure to predict the deficit in nickel availability in 2021. Despite assuming a surplus, there was actually a significant deficit of almost 170 kt. These inconsistencies highlight the need for a critical examination of their forecasts and assessments.

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