Due to the suspension of the Norilsk concentrator, the Oktyabrsky and Taimyrsky mines, experts expect a palladium deficit of 0.9 million ounces in 2021 against the balance in the previous estimate. At the same time, experts say, the deficit will be partially offset by the sale of stocks, including metal produced but not sold by Norilsk Nickel in 2020.
A revival in the auto industry in the second half of last year, especially in China, and disruptions to refining capacity in South Africa have contributed to the continued global palladium deficit of 0.3 million ounces in 2020. This year, there has been a strong recovery in demand in the automotive and other industries to near pre-crisis levels, although growth is constrained by a shortage of semiconductors. The growth in demand will be met by increasing supply from South Africa and other regions, as well as from recycling.
In addition, the company has lowered its forecast for a surplus in the nickel market this year from 75,000 tons to 52,000 tons. In 2022, according to the manufacturer, the surplus will exceed 100,000 tons amid the ongoing expansion of low-grade nickel production. However, it could be constrained by accelerated growth in the battery sector and a potential shrinking supply.
“The balance of the nickel market in the future will be determined by the growth rates of the production of electric vehicles. Today, the electric vehicle market is growing rapidly thanks to government incentives and the development of battery technology while lowering costs, ”the company said, adding that experts are of the opinion that long-term growth in nickel consumption will be driven primarily by the growth rate of the battery sector. .
Last year, the platinum group metals market was seriously affected by the pandemic, but market participants were able to adapt to the new conditions and mitigate the negative impact, the company notes. "At the same time, the impact of COVID-19 has not yet ended, the consequences of the crisis are obvious, including this can be seen in the shortage of semiconductors, due to which this year car production will be 2-3 million vehicles lower than previously predicted," said in the message of "Norilsk Nickel". At the same time, the company predicts that in 2022 car production and consumption of platinum group metals will recover to pre-crisis levels.