Price boom and unprecedented bull cycle for metals expected. EU ferrochrome prices rise. Is the graphite shortage coming? EU 98% dependent on graphite imports. Nickel prices rise significantly – Russian nickel missing and sulphates scarce.
After the end of 2021 and the beginning of 2022 were still sounding the death knell for commodity prices in the course of 2022, the assessment of consultants and analysts has now turned around.
Commodity prices have risen significantly in the past year, so this boom is not only due to Ukraine. It reflects rising demand and limited spare capacity created by years of low investment in mining.
Add to this shifting supply chains, multi-billion investments in green transformation, massive infrastructure projects in the United States, Europe and China, and new geopolitical challenges between East and West.
This boom in demand should lead to an unprecedented bull cycle in metals and a multi-year high in prices that will settle at a whole new level.
The looming shortage of natural and artificial graphite, more than 80% of which is produced in China, is likely to pose new challenges to the frantic efforts towards a Net Zero society and slow down the transformation.
Against this backdrop, too, although the graphite shortage was not an issue at the time, it shows that we were right in our criticism of the European Commission’s hasty and ill-conceived implementation of “Fit for 55“.
When making such world-changing decisions, it must be clear beforehand on the basis of which dependencies one wants to do so and whether one is at all capable of doing so.
These wrong decisions can also be seen in the recently introduced anti-dumping measures by the EC against imports of graphite electrodes from China – which are used in steel production, among other things. This is despite the fact that the EC is well aware that Europe is currently 98% dependent on graphite imports, as can be seen from a reply by Thierry Breton, Commissioner for the Internal Market, to a question of an EU parliamentarian. When one hand doesn’t know what the other is doing.
Ferrochrome prices in Europe have recently increased significantly. The background here is to avoid buying and importing Russian ferrochrome and to switch to alternative sources of supply.
The Chinese market reports difficulties in buying and importing Russian nickel. This, in connection with the production restrictions in China and the already scarce availability of nickel, has caused prices on the spot market and on the SHFE to rise significantly today. Prices in nickel contracts have risen on average by about 5 to 6.5%.
In addition, a significant undersupply of several thousand tonnes of nickel sulphates has emerged in China for March 2022. Therefore, it can currently be assumed that prices are not likely to change much in the near future.
SHFE aluminium futures have also risen again today in China and have increased by up to 2%.