Sheritt: Finished Nickel Production Increased 53% Year-on-year in The Third Quarter Of 2022

Sherritt International Corporation (" Sherritt "), a laterite mining and hydrometallurgical nickel and cobalt extraction company, announced its third quarter results and results for the three months ended 2022 and the first nine months of 2022.

Sherritt's share of finished nickel production in the Moa JV was 4,443 tonnes, up 53% from 2,908 tonnes in 2021. Nickel production in the first three quarters of 2022 was 11,393 tonnes, compared with 11,434 tonnes in the same period of 2021. Finished goods production was higher in the current quarter mainly due to planned annual maintenance downtime occurring in the second quarter of 2022 (2021 in the third quarter).

Finished nickel sales exceeded production in the third quarter of 2022, while finished nickel sales were below production in the first nine months of 2022. At the end of the second quarter and throughout the third quarter, logistics related challenges were encountered in shipping finished products to customers. Much of the delay has to do with consumers taking a more cautious approach to restocking as they resume economic activity following the relaxation of the coronavirus clearance policy. Global inflation and a decline in European steel manufacturing due to sharply higher energy costs and uncertainty over energy supplies have dampened the mood among Chinese consumers to increase activity in the country.

此外,Sherritt提供了农业部的细节joint venture's expansion plans, which will see Moa increase mixed sulfide intermediate production by 6,500 tonnes of nickel and cobalt at a low capital intensity of approximately US $13,200 per tonne nickel per year, on top of the previously approved SPP project. Upon completion of the SPP in early 2024 and a second expansion phase in late 2024, the total increase in MSP is expected to be 20% of current production or 6,500 tonnes of nickel-bearing metal. Sherritt estimates that two-thirds of the increased production will be processed into finished nickel and cobalt, taking full advantage of the current refinery capacity to process Moa feedstock, with the remainder sold as MSP.

Nickel prices remained relatively stable in the third quarter, with prices falling to $10.11 / lb from $10.48 / lb at the end of the second quarter. The average reference price in the third quarter was US $10.01 / lb compared to US $13.13 / lb in the second quarter, with lower volatility on the London Metal Exchange (LME), high energy prices in Europe, and inflationary pressures and global recession fears all having a moderating effect on nickel prices. For much of the quarter, nickel prices have fluctuated within a relatively narrow range - hitting a high of $11.28 / lb in September and $8.66 / lb in July, with all metals down in a single session. Overall, however, prices remained in the $9.50 / lb and $10.50 / kg ranges for most of the quarter. Combined LME and SHFE inventory levels continued to fall in the third quarter, with total LME and SHFE inventories falling from 66,780 tonnes at the end of the second quarter to 54,444 tonnes at the end of the third quarter.

Near-term market fundamentals are complex and, in some cases, market uncertainties are juxtaposed by declining inventory levels, slower-than-expected economic recovery in China, the potential for increased sanctions on Russian nickel and the potential for self-sanctioning actions, the strengthening of the US dollar against most other currencies, and anticipated nickel oversupply, primarily in Category II, particularly NPI, Persistent global logistics problems, inflationary pressures and fears of a global recession.

The long-term outlook for nickel remains positive, with strong demand expected from the stainless steel industry (by far the largest nickel market) and the fast-growing electric vehicle battery market.

Continued growth in stainless steel and exponential growth in the electric vehicle battery market are expected to lead to significant medium-term deficits as countries and automakers implement climate change and net zero strategies. The deficit is expected to have the biggest impact on the supply of Class I nickel to the electric vehicle market made by Sherritt. In September 2022, nickel demand was projected to grow 43% between 2021 and 2026 and 163% between 2040. A compound annual growth rate (CAGR) of 4% through 2040, with electric vehicle batteries and storage growing at a CAGR of 11% over the same period, offsetting slow growth in stainless steel demand.