Posted on 28 Mar 2022
Russian miner Nornickel has already fixed nickel prices on the domestic market at February's level, says the company’s vice president Anton Berlin.
Previously prices for Russian buyers were pegged to LME nickel prices. Now, from March to May inclusive, Nornickel will use a fixed price, which corresponds to the average metal prices in February for Russian consumers. The company sells 7-10% of nickel in Russia, Kallanish notes.
Earlier, Nornickel received a fixed recommended price from Russian Ministry of Industry and Trade for copper, Berlin said. Previously, the company formed it based on metal prices on the LME.
The average price of nickel in March, according to the LME, is about $31,550/tonne, which is 34% more than in February.
Considering Russia's small share in nickel supplies, the effect on the company's revenue will be negligible, with price caps covering less than 2% of sales, according to Russian analysts. In general, the share of Nornickel's revenue from sales in the Russian market in 2021 was at the level of 4%, so the restrictions will not have a tangible effect on the company's results, they claim.
Since the beginning of the year, nickel prices have risen by more than 40%, with the main increase in February and March against the backdrop of Western sanctions against the Russian financial sector and logistical difficulties with the supply of export products from Russia.
Earlier, Nornickel said it has no plans to leave Western markets yet, after the Russian invasion in Ukraine and new Western sanctions again Russia. The company’s primary task is to gain a foothold in existing markets and not to leave them.
The company plans to produce 205,000-215,000 t/y of nickel this year, and copper output may grow to 365,000-385,000 t/y. In 2022, Nornickel expected the nickel market to swing to a mild 42,000 t surplus, but this was before the Russian invasion in Ukraine.
Source:Kallanish
