Stainless Steel World Magazine December 2023

[ Nickel ] both regions , usage declined in 2022 . As mentioned previously , demand in Africa will decrease in 2023 ( -4.6 %), but a recovery is anticipated in 2024 (+ 1.9 %). The stainless steel sector remains the most important first-use market for nickel , although its percentage share of the market has been slowly declining since it peaked in 2020 , because of the growing electrification of vehicles and subsequent demand for EV batteries containing nickel . In 2022 , stainless steel accounted for almost 69 % of world primary nickel usage ( not counting scrap ). The World Stainless Association ( former International Stainless Steel Forum / ISSF ) released figures for the first half year of 2023 showing that “ stainless steel melt shop production decreased by 1.7 % year – on – year to 28.4 million metric tons ”, after increasing by + 12.5 % in 2021 and decreasing by -5.1 % in 2022 . Forecast figures for world stainless steel consumption ( as of October 2023 ) indicate a level of around + 1.2 % for 2023 and + 3.4 % for 2024 . These figures confirm that demand growth from the stainless steel sector is recovering and is expected to be stronger next year . As reported by the consultant “ EV Volumes ”, world sales of EVs reached 9.4 million in the first 9 months of 2023 (+ 39 % growth ), after increasing + 109 % in 2021 and + 55 % in 2022 . EV sales represented 16 % of global light vehicle sales so far in 2023 , compared to a share of 8.3 % in 2021 and 14 % in 2022 . Yearto-date in 2023 , battery electric vehicles ( BEVs ) had a share of around 11 % ( over 6.5 million ) with plug-in hybrid electric vehicles ( PHEVs ) accounting for the remaining 5 % share ( more than 2.8 million ), while in 2022 BEVs stood at 10 % share ( about 7.2 million ) and PHEVs at 4 % share ( about 2.9 million ). For the total year of 2023 , it is possible that total EV sales could reach more than 13 million . In China , annual production of ternary precursors used to produce different types of nickel-containing batteries has been consistently rising , reaching 320kt in 2020 , 634kt in 2021 , and 843kt in 2022 , according to MySteel . With regard to NCM batteries , high-nickel NCM811 and NCM622 precursors are becoming more favoured and represented 42 % ( 21 % in 2020 and 29 % in 2021 ) and 28 % ( 18 % in 2020 and 24 % in 2021 ) of NCM precursor production , respectively , in 2022 . In the first 9 months of 2023 , production increased + 1.5 %, with negative growth until April ( -1.6 %) –

tonnes	LME Daily Stocks	SHFE Stocks	LME Prices
75,000

Oct-22 Nov-22

Dec-22 Jan-23

Feb-23 Mar-23

Apr-23 May-23

Jun-23 Jul-23

Aug-23

Sep-23

Oct-23

50,000

25,000

Sources : London Metal Exchange , Shanghai Futures Exchange .

due to subsidy cuts and the peak of the pandemic in the country . September and provisional figures for October show a decline in the production .

Nickel prices and stocks Lastly , we will briefly analyse nickel prices and exchange stocks for the first 10 months of 2023 . Since the beginning of 2023 , the London Metal Exchange ( LME ) nickel price ( close , cash settlement ) has been trending downwards . After starting the year at 31,200 USD / t , prices decreased to 21,895 USD / t in mid-March . This was followed by a recovery that ended on 20 April with a peak of 25,540 USD / t . Since then , a decreasing trend has become apparent . In mid-September prices fell below 20,000 USD / t for the first time since December 2021 . During this period , peaks have been successively lower – 25,100 USD / t on 3 May , 23,140 USD / t on 16 June and 22,355 USD / t on 1 August ( this latter spike matching Indonesia ’ s announcement of decisions to prevent nickel oversupply ). Looking at monthly average prices , after a decrease of 3,383 USD / t in March 2023 , the 3 rd largest since 2010 ( the two largest decreases were in the atypical year of 2022 ), April was the only month with an average monthly price increase (+ 450 USD / t ). This coincided with reports of short covering and very low visible stocks . From May to October , coinciding with growing reports of the market being oversupplied , the rising possibility of converting class 2 to exchange deliverable class 1 nickel and

LME nickel prices and stocks

USD / t 33,000

31,000 29,000 27,000 25,000 23,000 21,000 19,000 17,000 15,000

new listings at the LME , average monthly nickel prices have been decreasing on average at about 900 USD / t each month , with a faster decrease seen in May ( -1,527 USD / t ) and a slower one in July ( -295 USD / t ). After a more or less steady decrease from 270,000t since April 2021 , followed by a slight increase in the fourth quarter of 2022 , combined LME and Shanghai Futures Exchange ( SHFE ) nickel stocks started 2023 at a level of about 57,900t . Since the beginning of the year , destocking recommenced at an average pace of about 4,000t per month until end-May . 27 April marked the first time LME stocks had fallen below 40,000 t since 2007 , and on 16 June the LME had its lowest nickel stocks level declined to 36,810t . At that time SHFE stocks were already recovering from the lowest value to ever be recorded since the contract was launched in 2015 , 506t , in the last week of May . Combined exchange stocks hit a lowest point on 1 June ( 38,162t ) and , apart from July , have been increasing every month , finishing October at 53,952t . Significantly , about 9,000t were added in September , 5,000t to LME and 4,000t to SHFE warehouses . LME end-of-month off-warrant stocks in August were 7,580t . A minimum level of 385t in May 2023 , the lowest since this figure started to be published in February 2020 , was followed by a sharp increase in June , to 6,587t . This was boosted by additions to European and US warehouses , whilst in Asia the figure remains under 100t .

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