Russia's leading nickel producer has scrapped its production growth targets

Russia's leading nickel producer has scrapped its production growth targets for 2030 for the time being and announced it will present new forecasts at the end of the year. The company cites the need to recalibrate its mining projects after losing access to Western suppliers of technical equipment in the wake of the Ukraine war as the reason. Previously, it had projected 15% growth in annual nickel production to 250-270k tonnes by 2030, compared with levels reached in 2019/20. Last year, production was 219 thousand tonnes. However, the company had already forecast a decline in production for this year.

Russia is a major supplier of grade 1 nickel, which means that concerns about supply there have a significant effect on the nickel price on the LME (where only higher-grade nickel is accepted in warehouses). However, the comparatively robust price - last year nickel even gained in price - has probably already priced in corresponding supply risks to a large extent, so that the further upside potential appears low. Nevertheless, we expect the price to rise in line with the general trend on the industrial markets in the course of the year.

Source: Commerzbank Research, Photo: Fotolia