December Nickel Price Forecast: Higher-Cost Mines the First to Reduce Production

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stainless-nickel-L1Nickel miners are under mounting pressure to reduce production and even shut down operations in the face of dropping nickel prices, but with one caveat, according to an Australia’s Independence Group:

“We are at price levels that are unsustainable in the long term,” Peter Bradford, managing director of Independence, told Reuters. “The capacity that will be shutting down will be the higher-cost nickel mine production.”

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Independence is expanding its nickel mining footprint despite its peers cutting back production with prices falling and about half the global sector losing money, Independence told the news source.

“We don’t understand it, we won’t wait for the markets to turn to justify operations,” Ivan Glasenberg, chief executive of mining and trading group Glencore told an investment briefing last week.

Independence is building the Nova nickel mine in Australia with plans to begin production in December 2016, according to the news source.

“Nova is an extremely robust project that will be able to weather the commodity price cycle,” Bradford added.

What Does 2016 Have in Store For Nickel, Other Metals?

A significant contributing factor to the bearish metals market in recent months has been the economic slowdown in China. The Far East nation makes up half of the world’s commodities demand. Is there a recovery in sight for 2016?

Says our own Raul de Frutos: “Contrary to what others are saying, we suspect that the slump in China’s stock market could continue, resulting in more fears and more sell-offs in commodities/metals markets.”

How will base metals fare for the remainder of 2015 and into 2016? You can find a more in-depth nickel price forecast and outlook in our brand new Monthly Metal Buying Outlook report. For a short- and long-term buying strategy with specific price thresholds:

 

 

 

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