8 February 2023 – A closer look at the worldwide nickel production paints a dramatic picture. Even if the figures of the U.S. Geological Survey suggest otherwise at first glance. The world has a nickel problem, with one exception. A US court upholds the Trump administration’s steel tariffs. And US HRC prices are rising by more than 25%.
World nickel production has a dramatic problem, with one exception
The latest data from the U.S. Geological Survey, a scientific agency of the U.S. government, paints quite a dramatic picture in terms of global nickel production in 2022.
Nickel production collapses dramatically
Even if the production volume of nickel could be increased by about 20% in 2022, this is solely due to the main producer Indonesia. According to the available data, the rest of the world only achieved a production increase of 1.2%. In many producing countries, production is even declining, e.g. in the Philippines, which is now already thinking aloud about a possible nickel export tax. And the Russian producer Nornickel, which is one of the most important producers in the world, has meanwhile even fallen back to the production capacities of 2017. And at the moment it seems to be concentrating only on maintaining its existing capacities.
Indonesian nickel used up in 2031?
In view of the global demand, especially for the green transformation and the quantities of nickel required for this, this is bad news. According to current calculations based on the new data and assuming the known nickel reserves, Indonesian nickel processors are likely to be faced with empty mines from 2031 at the latest.
Molybdenum has shown the way for nickel production
Before then, the quality of the nickel ores mined is likely to decline further and the supply will become tighter, much as can currently be observed with molybdenum. This could lead to an even earlier depletion of Indonesian and global nickel deposits.
Export ban becomes bigger and bigger problem
The Indonesian government’s export ban on nickel ore and other low-processed nickel products does not benefit the rest of the world. At the same time, nickel mining in Indonesia is facing growing criticism from environmentalists, who are increasingly criticising the mining there. However, an end to the export ban is not to be expected in the foreseeable future. The Indonesian government knows about this treasure under its feet and is unlikely to compromise on this. Because to call 50% of the world’s nickel production one’s own is saying something.
Section 232: U.S. appeals court allows higher tariffs on imported steel products
The U.S. Federal Circuit Court of Appeals in Washington, D.C. on Tuesday upheld the former Trump administration’s 25% tariffs on steel derivatives, such as nails and fasteners.
Similar tariffs on other imported steel products, including flat-rolled products, pipes and tubes, had been imposed in 2018 after then-Commerce Secretary Wilbur Ross found that the imports threatened national security by undermining demand for US steel and depressing the use of domestic steelmaking capacity.
The lawsuits, which have since been brought before several US courts, were recognised by the Appeal Court as admissible and lawful. The Biden administration had also recently upheld the Section 232 Tariffs.
Punitive tariffs on steel increasingly firmly enshrined in law
All in all, another indication of how cemented the additional tariffs on steel are not only on the American side of the Atlantic, but also on the European side. And how, with the hope of an ever-possible end to Section 232 and the EU Safeguard measure, attempts are being made to spread deliberately false rumours.
HRC prices in the United States continue to rise
HRC steel prices in the United States had surpassed the $800/ST mark yesterday and producers currently appear to be looking to raise prices further in the reviving US business. Since the end of November 2022, prices in the United States have increased in several steps by more than 25%, in some cases even by more than 30%.
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