Monthly Metal Review

Nickel / Cobalt & Lithium (April 2019)

The rout on cobalt metal prices halted in late March, with prices reaching a low of $13.30 per pound in late-March, according to Fastmarkets MB, before rebounding throughout April, to reach $15.90 per pound in late April, a rebound of some 19.5 percent. While consumers have been reluctant to restock, some investor buying has been noted and as the new financial year in Japan started in April, it is believed to have prompted some fresh buy-ing as budgets were renewed. While there have been some sup-ply/export disruptions from the DRC and Zambia, there was news in mid-April, that some of the output from Katanga will be exported, but just as news of the halting of exports in November did not lift cobalt prices, news that Katanga would resume partial exports has not sent prices lower. With the ramp-up in large scale production from Katanga and the Roan Tailings Reclamation projects, it seems the cobalt market will remain in a supply sur-plus and that is likely to halt the price rebound travelling too far, this despite continued strong EV sales. In the first quarter, Chinese EV sales reached 254,000, which was up 118 per-cent, year-on-year. It will be interesting to see if the less generous Chinese subsidies, announced in April, dent the growth rate – probably not, as EV sales are also driven by the ease of getting a licence plate for an EV, reducing pollution and buying the latest technology. News that BMW have locked in cobalt supply from Murrin Murrin and CTT from 2020 is noteworthy and raises the likelihood other OEMs will also feel the secure supply. In a separate news, Australian cobalt developer Jervois Mining an-nounced to buy Canadian Ecobalt solutions with an eye on the American market. The lithium market is showing signs of being in good supply especially in China where excess supply has led to a pick-up in Chinese exports of lithium products. As this is happening at time when China’s imports from South America have been falling, it suggests China’s processors and convertors have been more successful at producing battery grade lithium products that are acceptable to battery manufacturers in Japan and South Korea. It also means China has been successful in increasing domestic production as well as processing imported spodumene into battery grade lithium products that it can export. As more im-ported hard rock and domestic lithium is produced and qualified by downstream cathode and battery manufacturers it is likely to displace more South American brine production. All in all, this seems set to keep lithium product prices under pressure. Low lithium prices and weak lithium equity prices, are expected to see further M&A activity – all this is a sign that the market is confi-dent that supply will become tight again in the years ahead. In support of the expectations on the supply tightness, Chinese lithium producer Tianqui Lithium disclosed its plans to expand its capacity to 1.95 million t/annum of Li concentrates and 113.4 kt/nnum of lithium chemicals by the end of 2020. Greenbushes spodumene mine, a JV between Tianqui and Al-bermale, another large Lithium producer, is building its second and third chemical grade lithium concentrators. While the second 600,000 tpy plant is expected to commence production later this year, the third plant of same capacity is expected to start produc-ing only by early 2021. SQM, a Chilean producer in which Tianqui has around 24% stake is targeting to produce 120kt per annum of lithium salts by 2020 . It aims to add another 80kt/annum in capacity by 2023. Also, Tianqui’s lithium hydroxide plant in Aus-tralia is expected to commence production later this year after successful trials in December last year. Bullish sentiment in nickel seems to have waned, along with the other base metals, and this is in line with generally dete-riorating economic data as well as the huge growth in stainless steel production in Indonesia that is rising hand-in-hand with increases in nickel pig iron production in the country. The Inter-national Nickel Study Group (INSG) showed that the global refined nickel market was in a deficit of 5,700 tonnes in the first two months of 2019, compared with a 24,400 tonne deficit in the same period in 2018. As stainless steel output in Indonesia ramps up it may well curb output in other regions, thereby dampening demand for nickel units in those regions. While the heat may have come out of the nickel price, LME stocks continue to trend lower and at 175,000 tonnes they down some 7,000 tonnes from late March and 31,000 tonnes below where they were at the start of the year. Shanghai Futures Exchange stocks are also stuck in a downward trend and have fallen to 9,500 tonnes from 14,900 tonnes at the start of the year. All in all, the outlook remains bright, stainless steel is seen as a green metal that sees stronger annual growth than most of the other metals and demand from non-stainless steel industrial uses remains strong too, especially demand for nickel sulphate from the lithium-ion battery industry. Batteries account for around six percent of nickel consumption, this is expected to increase to around 21 percent by 2025. Era-met’s New Caledonia-based nickel subsidiary, Société Le Nickel (SLN), is set to increase nickel ore exports to 4 million tonnes in 2020, from a planned 1.5 million tonnes in 2019 and 1.2 million tonnes in 2018. This comes after the New Caledonian govern-ment has increased its export licence to 4 million tonnes per year for a period of ten years. This output will help provide nickel units for the stainless steel market, but not so for the battery market. The battery market is likely to have to rely on nickel from sulphide mines, HPAL operations and above ground stocks.

Daily Prices

May 2019

Copper
Date(Fix.) ($/MT)
Average 6078.19
23-05-2019 5860
22-05-2019 5920
21-05-2019 6004
20-05-2019 5985
17-05-2019 6025
16-05-2019 6089
15-05-2019 6002
14-05-2019 6007
13-05-2019 6042.5
10-05-2019 6135.5
09-05-2019 6112
08-05-2019 6103
07-05-2019 6174
03-05-2019 6180
02-05-2019 6214
01-05-2019 6398
Silver
Date(Fix.) ($/OZ)
Average 14.68
23-05-2019 14.48
22-05-2019 14.435
21-05-2019 14.43
20-05-2019 14.415
17-05-2019 14.48
16-05-2019 14.795
15-05-2019 14.815
14-05-2019 14.755
13-05-2019 14.66
10-05-2019 14.795
09-05-2019 14.82
08-05-2019 14.93
07-05-2019 14.83
03-05-2019 14.655
02-05-2019 14.675
01-05-2019 14.88
PM MEAN AM Gold
Date(Fix.) ($/OZ)
Average 1282.74
23-05-2019 1275.95
22-05-2019 1274
21-05-2019 1276
20-05-2019 1275.25
17-05-2019 1285.8
16-05-2019 1295.55
15-05-2019 1298.9
14-05-2019 1297.6
13-05-2019 1282.95
10-05-2019 1285.4
09-05-2019 1284.1
08-05-2019 1287.75
07-05-2019 1281.3
03-05-2019 1270.05
02-05-2019 1271.45
01-05-2019 1281.8
Date(Fix.) ($/OZ)
Average 1283.37
23-05-2019 1279.8
22-05-2019 1273.9
21-05-2019 1273.575
20-05-2019 1276.05
17-05-2019 1283.3
16-05-2019 1293.625
15-05-2019 1299
14-05-2019 1298
13-05-2019 1289.275
10-05-2019 1286.25
09-05-2019 1285.1
08-05-2019 1286.475
07-05-2019 1281.25
03-05-2019 1274.3
02-05-2019 1271.2
01-05-2019 1282.8
Date(Fix.) ($/OZ)
Average 1284.00
23-05-2019 1283.65
22-05-2019 1273.8
21-05-2019 1271.15
20-05-2019 1276.85
17-05-2019 1280.8
16-05-2019 1291.7
15-05-2019 1299.1
14-05-2019 1298.4
13-05-2019 1295.6
10-05-2019 1287.1
09-05-2019 1286.1
08-05-2019 1285.2
07-05-2019 1281.2
03-05-2019 1278.55
02-05-2019 1270.95
01-05-2019 1283.8
Lead
Date(Fix.) ($/MT)
Average 1822.38
23-05-2019 1781
22-05-2019 1787
21-05-2019 1795.5
20-05-2019 1797
17-05-2019 1809
16-05-2019 1826
15-05-2019 1780
14-05-2019 1768
13-05-2019 1785
10-05-2019 1823
09-05-2019 1855
08-05-2019 1860
07-05-2019 1867
03-05-2019 1880
02-05-2019 1859
01-05-2019 1885.5
Zinc
Date(Fix.) ($/MT)
Average 2761.84
23-05-2019 2668
22-05-2019 2713
21-05-2019 2723
20-05-2019 2705
17-05-2019 2755
16-05-2019 2781
15-05-2019 2730
14-05-2019 2715
13-05-2019 2719.5
10-05-2019 2751
09-05-2019 2725
08-05-2019 2764
07-05-2019 2835
03-05-2019 2867
02-05-2019 2832
01-05-2019 2906
Tin
Date(Fix.) ($/MT)
Average 19651.25
23-05-2019 19720
22-05-2019 19650
21-05-2019 19750
20-05-2019 19675
17-05-2019 19625
16-05-2019 19675
15-05-2019 19850
14-05-2019 19890
13-05-2019 19465
10-05-2019 19650
09-05-2019 19475
08-05-2019 19640
07-05-2019 19660
03-05-2019 19375
02-05-2019 19550
01-05-2019 19770
Nickel
Date(Fix.) ($/MT)
Average 11969.69
23-05-2019 11870
22-05-2019 11965
21-05-2019 12030
20-05-2019 11915
17-05-2019 12025
16-05-2019 12215
15-05-2019 11930
14-05-2019 11820
13-05-2019 11730
10-05-2019 11865
09-05-2019 11710
08-05-2019 11965
07-05-2019 12050
03-05-2019 12170
02-05-2019 12125
01-05-2019 12130
Cobalt
Date(Fix.) ($/MT)
Average 34718.75
23-05-2019 34500
22-05-2019 34500
21-05-2019 34750
20-05-2019 34750
17-05-2019 34750
16-05-2019 34750
15-05-2019 34750
14-05-2019 34750
13-05-2019 34750
10-05-2019 34750
09-05-2019 34750
08-05-2019 34750
07-05-2019 34750
03-05-2019 34750
02-05-2019 34750
01-05-2019 34750