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Global nickel surplus to narrow in 2021 as demand rebounds - Antaike

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NANJING, China Nov 5 (Reuters) - The surplus in the global nickel market this year is set to narrow in 2021, research house Antaike said on Thursday, as a rise in consumption of the metal used in stainless steel and electric-vehicle batteries outpaced production growth. Antaike, the research arm of the China Nonferrous Metals Industry Association, sees primary nickel in a surplus of 118,000 tonnes this year, following a coronavirus-led drop in consumption from 2019, when the market was in a 31,000-tonne deficit, according to analyst Chen Ruirui.

While global production is expected to rise by 6.2% to 2.586 million tonnes next year, helped by an increase in ore supply from Indonesia, Australia and the Philippines, consumption is projected to grow 8.6% to 2.518 million tonnes, Chen said at the China International Nickel and Cobalt Conference in Nanjing. The leaves a surplus of 68,000 tonnes. China accounts for more than half of global nickel consumption but its own output is falling. Despite this, "production from China-invested projects in Indonesia is growing fast," Antaike chief nickel analyst Xu Aidong said on Wednesday. Chinese companies have set up shop en masse in nickel ore-rich Indonesia, where they already produce stainless steel raw material nickel pig iron (NPI) and plan to make nickel chemicals for EV batteries.

Following Indonesia's ban on nickel ore exports at the end of 2019, its domestic NPI production is set to rise to 550,000 tonnes this year, surpassing China's 500,000 tonnes, Chen said. Indonesian NPI output is seen growing further to 685,000 tonnes in 2021 and could account for 41.2% of China's stainless steel raw material supply by 2025, up from 26% in 2020, she added, estimating that China's NPI production will fall to 400,000 tonnes next year. China's annual production capacity for battery chemical nickel sulphate is meanwhile set to reach 1 million tonnes this year, Chen said, although actual output will only be around 520,000 tonnes.

The table below shows Antaike figures in tonnes.

2019 2020E 2021F Global production 2.371 mln 2.436 mln 2.586 mln Global consumption 2.402 mln 2.318 mln 2.518 mln Global balance -31,000 118,000 68,000 China production 826,000 670,000 635,000 China consumption 1.286 mln 1.267 mln 1.276 mln Average price ($) 13,960 14,100 13,800

(Reporting by Min Zhang and Tom Daly, Editing by Sherry Jacob-Phillips)

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