Sherritt International Corp. said Wednesday the long-term outlook for both nickel and cobalt is good, even though near-term visibility on prices is limited.
Leon Binedell, the company’s president and chief executive, said “despite some steady headwinds moving into Q3 as nickel and cobalt prices come off recent highs, we continue to be encouraged by long-term market fundamentals.”
Nickel prices saw volatility and multi-year highs in the first quarter of this year, Sherritt said, adding the second quarter saw a “period of reasonably stable prices” before declining. Prices ending the second quarter at $10.48/lb, down from $15.15/lb at the end of the prior quarter.
“Near-term visibility of market fundamentals, including inventory levels, beyond 2022 is limited given the uncertainty caused by a number of recent geopolitical and macroeconomic developments,” including Russia’s invasion of Ukraine, ongoing impacts caused by Covid-19, and inflationary pressures, among other concerns, the company said.
Nickel’s long-term outlook remains positive on account of strong demand expected from the stainless steel sector and the electric vehicle battery market, Sherritt said.
Cobalt prices declined in the second quarter “due to concerns relating to the slow rate of full reopening of the Chinese economy, global inflation and economic recession concerns,” the company said.
Near term visibility on cobalt prices is limited, due to many of the same reasons as nickel, Sherritt said. The company also cited ongoing logistics issues relating to the transportation of cobalt hydroxide from the Democratic Republic of Congo.
Longer-term, cobalt demand is forecast to be positive “as cobalt is a significant component in electric vehicle battery chemistries,” the company said.
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