OJSC MMC Norilsk Nickel has predicted a deficit of nickel in 2015, according to the company's report under IFRS.
"We expect that the minor growth in supply cannot offset the greater power consumption, which will balance the market this year and account for a significant deficit in 2015," the company points out.
As recalled by Norilsk Nickel, Indonesia, a major supplier of raw materials for Chinese iron nickel producers imposed a ban on exports of unprocessed ores with the nickel concentration of less than 4%. This led to the nickel price rally through May to $21,000 per tonne. Albeit no physical shortage of nickel developed in 1H2014, the markets were acting on the expectations that nickel would likely move into a deficit towards H2 2014. The Indonesian government's determination to keep the ban in place and unaltered with regard to
nickel has not changed since the presidential elections in July.
Norilsk Nickel continues to believe in nickel price growth in the medium term assuming that the Indonesian ban remains in place unaltered. We expect NPI output in China to reduce by over 50 thousand tonnes year-on-year this year and at least another 150 thousand tonnes year-on-year in 2015. We also expect that the substantial part
of the lost Chinese NPI volumes to be compensated by the ramp-up of new laterite projects in
Indonesia, Oceania, Madagascar, and Latin America. We believe that the ramp-up of these projects is largely subject to the successful resolution of many technical issues," the report emphasizes.
OJSC MMC Norilsk Nickel (tax number: 8401005730) is Russia's largest diversified mining and metallurgical company, the world's leading producer of nickel and palladium and one of major platinum, rhodium, copper and cobalt producer. Besides, the company produces a wide range of by-products including gold, silver, tellurium, selenium, iridium and ruthenium. The mining and processing assets of the MMC Norilsk Nickel group are located in the Norilsk industrial area, the Kola Peninsula as well as Finland, USA, Australia, Botswana, and RSA.
IFRS net profit of MMC Norilsk Nickel for H1 2014 grew almost three times to $1.456 billion from $545 million for the same period in 2013. Revenue increased by 0.4% to $5.708 billion from $5.686 billion, EBITDA by 8.6% to $2.496 billion from $2.299 billion. The company's net debt was reduced by 31.7% to $3.461 billion from $5.065 billion.
According to the DataCapital information retrieval system, RAS net profit of MMC Norilsk Nickel for H1 2014 grew 2.48-fold to RUB 51.334 billion from RUB 20.729 billion the year before. Revenue increased by 13.51% to RUB 148.676 billion from RUB 130.981 billion, sales profit by 29.47% to RUB 79.18 billion from RUB 61.156 billion, pre-tax profit 2.07 times to RUB 64.654 billion from RUB 31.293 billion.