The battery metals are set to be winners in 2020. Nickel consensus prices are forecast to rise successively out to 2023, with increases to the average from end-August targets. The consensus average for 2020 rose by 10.0%, for 2021 by 6.8%, for 2022 by 4% and for 2023 by 3.4%, on the back of the sharp price increase seen already. LME cash nickel has gained 52% since a low in early June, driven by robust stainless steel production, falling refined stocks and speculative interest related to constrained supply of nickel pig iron source material from Indonesia, driving refined prices higher. Nickel hit a five-year high of US$18,850/t on Sept. 2. Cobalt in 2020 is set to gain some 29.3% from the average of the first nine months of 2019. Since August, LME cash cobalt has risen after news that Glencore PLC would place its Mutanda mine on care and maintenance for two years. Consensus expectations are for cobalt to rise by 61.7% from 2019 to 2023.
There were some exceptions in the list of 2020 winners — notably palladium and iron ore. Palladium prices have been performing strongly in 2019 despite two major corrections, as expectations of growing demand from emissions controls have outweighed some weakness in the growth rate of auto sales numbers. At end-September, the palladium spot price was up 32.8%. We believe that the 2020 average shows an expectation of further corrections to come in an overall positive price trajectory. Iron ore prices are expected to fall from an overall strong price environment in 2019. Chinese winter steel capacity cuts and slowing steel demand growth should hamper demand for iron ore into early 2020. Added to that, the gradual return of supply from Brazil will place the balance under pressure, shrinking a market deficit. Consensus expectations are for average prices to fall out to 2022.
--- THE END ---
Copyright © 2019 by S&P Global Market Intelligence, a division of S&P Global Inc. All rights reserved. No content may be reproduced or distributed without the prior written permission of S&P Global Market Intelligence or its affiliates. The content is provided on an “as is” basis.