According to the estimate of the Australian Bureau of Resources and Energy Economics (BREE), in 2013 world nickel consumption is forecast to increase three percent over 2012, to 1.7 million mt. Consumption in China is forecast to increase by seven percent year on year to 825,000 mt as a result of higher building and construction sector activity consuming more stainless steel. This is expected to be partially offset by lower consumption in the European Union which is forecast to decrease three percent from 2012, to 323,000 mt in 2013.
Meanwhile, BREE said that global mined nickel production is forecast to decrease two percent in 2013 compared to 2012, to around 2.1 million mt in 2013. Indonesia's nickel production in 2013 is expected to decrease from 460,000 mt in 2012 to 390,000 mt. World production of refined nickel is forecast to remain steady at around 1.7 million mt in 2013.
Australia's refined nickel production in the financial year 2012-13 (ends June 30) is forecast to total 128,000 mt, up five percent compared to FY 2011-12. The BREE report indicated that in FY 2012-13 nickel mine production in Australia is forecast to remain stable year on year at 235,000 mt as a result of the closure of Norilsk's Lake Johnston mine in April 2013 and Xstrata Nickel Australia's Sinclair mine reaching the end of its production life in May 2013. In the fiscal year 2012-13, export volumes of nickel from Australia are expected to indicate a three percent year-on-year increase to 247,000 mt, in line with higher value refined production. Despite higher volumes, export values of nickel are forecast to decrease by 15 percent year on year to $3.5 billion, due to a lower Australian dollar-based nickel price.
According to BREE, international nickel spot prices averaged around US$17,314/mt in the first quarter of 2013, indicating a two percent quarter-on-quarter increase. Prices have declined since February to below US$14,000/mt by mid-June in response to lower demand growth for refined nickel in key Asia-Pacific markets. For the remainder of 2013, high stock levels are expected to limit the prospects of higher nickel prices which are forecast to average around US$15,400 for the year as a whole, 12 percent lower than in 2012.