Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Australia-based company Western Areas expects nickel production to be on the lower end of the projected guidance between 17,000-19,000mt in concentrates for FY21. The outlook for nickel remains strong, on the back of demand for batteries for electric vehicles and increasing rate of production of stainless steel, the company said.


In December quarter, the company mined a total of 3,518mt, down 16pc from the previous quarter. In half fiscal year (July-December), 7,665mt of nickel was mined. Sales in December quarter dipped 6pc to 3,535mt from the prior quarter. 


Lower grades at Forrestania operations in Western Australia were offset by strong nickel trading in December quarter. Forrestania operation includes the company’s Flying Fox and Spotted Quoll mines. In December quarter, Flying Fox produced 939mt of nickel, down 26pc from the previous quarter. Nickel mined at Spotted Quoll dipped 10pc to 2,579mt against the previous quarter.


Western Areas’ averaged realised price of nickel jumped to $10.31/lb in December quarter from $9.28/lb in September quarter. The company noted that nickel has benefitted from strong stainless steel production rates and the reduced availability of nickel Pig iron feed stocks in China. The emerging electric vehicle (EV) market is also gaining momentum, thereby increasing demand for the base metals serving as key components for the EV batteries. 


Western Areas said nickel battery technology will play a large role in electric vehicle batteries, which provides significant encouragement for nickel’s long-term demand outlook.

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