A Report by Nornickel, with Financial Market Analysis from ICBS Standard Bank

NornickelPublic Joint Stock Company "Mining and Metallurgical Company "Norilsk Nickel” and its subsidiariesGo to the glossary presents the third review of the nickel and platinum group metals (PGMPlatinum group metals taken as a whole or in any combination of platinum, palladium, rhodium, ruthenium, osmium and iridiumGo to the glossary) markets. It was prepared by experts from Nornickel and ICBC Standard Bank on the basis of a fundamental analysis of world economic and industry data.

“We have been issuing analytical reviews of the international markets for PGMs and nickel on an ongoing basis since 2018, ” said Anton Berlin, Nornickel Marketing director. “The industry analytics presented by us is designed for professionals working in this industry.”

The expert team updated the last year’s forecast and presented a new one — both for the current year and for the longer term.


Nornickel experts predict another year of palladium deficit. The demand for this metal in 2019 still exceeds supply, which is caused by the gap between production and consumption. Due to the tightening of environmental standards throughout the world, especially in China, the USA, the EU, and India, consumption from the automotive industry is growing (palladium is used in the manufacture of catalysts for vehicles with internal combustion engines).

The excess of demand over supply will continue for 3-4 years, however this year it will be partly eased by additional refined metal supply from South Africa where work-in-progress material was accumulated by mining companies in 2018. Next year, the shortage will intensify on the back of tougher emissions legislation, which stimulates consumption growth at a faster rate than the gradual increase in production.

It is gradually expected that the market will be balanced due to increased scrap collection, production growth by existing players, including Nornickel, as well as through new mining projects. This is also facilitated by the weakening of the rand (the currency of South Africa), which makes most projects in South Africa profitable, stimulating the growth of production and mining.


On the platinum market there is still a slight excess of production over industrial consumption (without investment demand): demand growth still lags behind supply due to weak consumption in the automotive industry (the metal is used in the production of diesel ICE catalysts) and the jewelry sector in China, while products in other industries, mainly in electronics and chemistry, show growth.

Next year, the forecast of a slight platinum surplus will remain, however, the review authors do not exclude: if high demand from investors continues, the market will be close to balance or there will even be a deficit. This can be facilitated by recently reached compliance of modern diesel cars with the environmental requirements, which is an incentive for the sales growth of these vehicles.

This year, platinum supply will recover, mainly due to growing production in South Africa (the main platinum mining region) — weak local currencies make most mines profitable. Among the potentially negative factors in the current year, according to experts, may be unrest of miners in South Africa during the negotiations on wages.


Growth nickel demand drivers in 2018 continued to be the production of stainless steel and battery materials. Global demand for primary nickel rose by 7.4% last year due to an increase in stainless steel production at the Indonesian factory Tsingshan. The growing appetite of manufacturers of battery materials, caused mainly by increased production of electric vehicles, increased consumption of nickel products in this sector by 42%.

The demand for nickel in 2019 will grow, but not as fast. In general, it will slow down to 4.7%. The significant increase in demand from the stainless steel sector will be due to China, which has imposed trade restrictions on the import of slabs and hot-rolled products from Indonesia, Korea, and Japan.

Nickel consumption by Tsingshan’s Indonesian stainless steel plant is expected, to remain at the same level as last year due to protectionist measures in the stainless steel trade, including both the already mentioned trade restrictions from China and in the West.

The growing battery sector will continue to support the need for nickel in 2019: the demand for this metal could grow by 28,000 t. However, the growth rate of demand in this sector may slow down: Chinese subsidies for electric cars are reduced, the next large-scale transition to cathode materials with a higher nickel content is expected no earlier than 2020.

The production of nickel pig iron (NPI) remains the driver of metal supply on the market. In 2019, the production volume of NPI in China and Indonesia will increase by 129, 000 tons to 861, 000 tons, which will be approximately 36% of the world nickel supply.

However, experts predict a recovery in the supply of high-grade nickel, which will be induced by both the growth plans for the supply of metals Nornickel (the world leader in the production of high-quality nickel) and the Chinese metallurgical company Jinchuan; an increase in the production of chemical products also stimulates this growth.

In the longer term, the expert team of Norilsk Nickel confirms the earlier forecast: in 2022 the market may face a deep structural deficit of the metal. This is due to the expectation of restoration of the ban on export of Indonesian ore, the slowdown in the development of HPAL technology (high-pressure acid leaching), continued growth in demand from the stainless steel sector (4% per year), and increase in demand from battery manufacturers for electric vehicles due to transition to NCM 811 (nickel-cobalt-manganese cathode material) in the early 2020s.​

Download the analytical report here.