Investor Presentaiton
Nickel Market in 2012 and Outlook for 2013-2014
Nickel supply and consumption, '000 t
1,844
1,761
1,769
1,617 1,614
1,680
1,501
1,433
2010
2012
Consumption
2011
■ Production
Nickel prices cut deep into cost curve
C1 cash costs + royalty + sustaining
capital ($/t Ni)
40000
35000
30000
25000
20000
15000
10000
5000
0
-5000
0
500
Cumulative production (kt Ni)
1000
2013E
1500
Key potential drivers of Nickel market in 2013-2014:
Price upside risk:
-
-
Expected cuts of production, primarily NPI: at current prices
around 40% of all nickel producers are below the water
Expected growth of high-quality nickel usage by 6% in
2013, mainly driven by +10% in stainless steel production
Appreciation of RMB against US Dollar and rising costs for
energy, labor and transport to push high cost operations of
NPI to $9-12/lb in the medium term
- Indonesia's taxes on raw materials exports and introduction
of export ban starting from 2014
Continuing growth in global consumption from non-stainless
steel applications, namely non-ferrous alloys in aerospace
sector
- Strong track record of persistent delays and technical
failures for new laterite HPAL projects and depleting
sulphide deposits worldwide
Price downside risk:
-
deterioration of macroeconomic environment
- potential additions of new NPI capacities in China in the
-
next 1-2 years with lower operating costs
ramp-up of non-Chinese new big projects
NORILSK NICKEL
Source: Company's estimates, Wood Mackenzie April Report
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