Due to Western sanctions on the Russian economy, Russian miner Nornickel has had to adjust its sales strategies in recent months, further aligning itself with China, Turkey, and Morocco. Nornickel has not been directly sanctioned; however, Western sanctions have impacted payment systems, supply chain logistics, and its ability to buy new equipment, according to Reuters. As for maintaining and developing markets, CEO Vladimir Potanin stated that keeping current clients is “more difficult, and new ones are expensive to win.” |
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AEGIS notes that the consequences of Western sanctions, along with falling European demand for Russian metals, could be why Nornickel stated recently that they might lower their output by about 5% this year. Their nickel production in 2022 was approximately 219,000 mt, thus, Nornickel’s output in 2023 will likely be approximately 208,000 mt. Based on USGS data, Russia is the world’s third largest nickel miner, responsible for approximately 9.3% of global nickel mine production. (Source: Reuters, Bloomberg, USGS) Nickel prices at the LME are down over 5% this month, even as the supply picture remains unclear. Nickel was one of the best-performing LME metals in 2022, with prices up nearly 36% that year. That said, this still could be a good time for end-users such as stainless-steel producers to hedge future needs by buying swaps. Such positions are standard for consumer hedging; however, they can result in opportunity costs or cash costs if metal prices decrease. Please contact AEGIS for specific strategies that fit your operations. (1/24/2023) |
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Note: Clients with AEGIS Platform access can see this and other research, plus hedge portfolio reporting and tools here. |
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Price Indications |
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Today's Charts |
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AEGIS Insights |
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01/18/2023: AEGIS Factor Matrices: Most important variables affecting metals prices 01/11/2023: Nickel Prices Could Remain Volatile Into 2023 12/21/2022: Nickel Prices Rally While 2023 Supply Picture Remains Unclear 12/14/2022: Could Peruvian Protests Affect Zinc Production or Prices? 12/07/2022: Does the Copper Rally Have Legs? |
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Important Headlines | ||
1/23/2023: Column: Power problems rein in global aluminium output growth 1/23/2023: Ford to cut up to 3,200 European jobs, union says, vowing to fight 1/23/2023: Potanin says sanctions constrain Nornickel, force it to adjust strategy 1/21/2023: Glencore halts operations in Peru due to violent protests 1/21/2023: Over 50 injured in Peru as protests cause 'nationwide chaos' |
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Important Disclosure: Indicative prices are provided for information purposes only, and do not represent a commitment from AEGIS Hedging Solutions LLC ("Aegis") to assist any client to transact at those prices, or at any price, in the future. Aegis makes no guarantee to the accuracy or completeness of such information. Aegis and/or its trading principals do not offer a trading program to clients, nor do they propose guiding or directing a commodity interest account for any client based on any such trading program. Certain information in this presentation may constitute forward-looking statements, which can be identified by the use of forward-looking terminology such as “edge,” “advantage,” “opportunity,” “believe” or other variations thereon or comparable terminology. Such statements are not guarantees of future performance or activities.
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