Nickel – Procurement Best Practices & Sourcing Strategies

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Nickel Procurement Market Size

Recent data from ELINT Market Research’s nickel procurement market research report indicate promising trends and a bright future for the nickel market. Global production of refined products is forecasted to reach 3.253 million metric tons in 2023, while that brought from mines is projected to hit 3.389 million the same year. These production upticks provide a basis for why the demand for nickel is robust the world over, with estimates of up to 3.183 million metric tons come 2023. These statistics give just what a balanced nickel market is, which dictates the equilibrium between the forces of production and consumption.

Significant producers of nickel sources worldwide are Indonesia, 51%; New Caledonia, 6%; Russia, 7%; and the Philippines, 10%. It is also noteworthy that market-dominant Indonesia, partnered by these key players, can connive preparedness for the stability and resilience of the set-up should an upset occur. The nickel market will move on a trajectory path in the future, and investment opportunities will be created, more specifically due to industrial uses, such as the electric vehicle sector and new technologies in battery storage. This promising situation may excite stakeholders and investors alike.

Market Definition

The excellent electrical conductivity, high melting point, and superior corrosion resistance of nickel make it a valuable metal for various industrial applications. Nickel plays a critical role in developing modern economies and technologies, as demonstrated by the production of batteries and stainless steel. Nickel use is still significantly influenced by the consumer goods industry, the manufacturing of automobiles, and the development of new infrastructure. The production of stainless steel requires nickel as a component.

Nickel Procurement Market Drivers

1. Electric Vehicle (EV) Revolution: The demand for EV batteries is increasing, predominantly on nickel-based technologies, and it’s supercharging the electric vehicle (EV) revolution. The strong encouragement and policies by the government toward electric vehicles have compelled the nickel industry to extend its research and exploration further.

2. Infrastructure Development: A significant amount of nickel is required to produce stainless steel, which is now increasingly recognized as an infrastructure metal since funding of infrastructure projects worldwide has grown.

Nickel Procurement Market Challenges

1. Price Volatility: When disturbances in supply, speculative trading, and geopolitical concerns rank among the most common sources of such events, the demand that heads into the nickel market is always one that of tranquility. Market participants must adequately plan their production and investment strategies while prices are highly volatile.

2. Environmental Concerns: Degradation of habitat and water pollution are two ecological issues brought up by nickel mining and processing activities. Due to strict emissions and waste management regulations, nickel producers must contend with higher costs and more constrained operations.

Nickel Procurement Market Opportunities

1. Grid-scale Energy Storage Systems: The growing emphasis on renewable energy sources drives the need for nickel-based batteries in energy storage systems. Growing renewable energy infrastructure presents significant opportunities for nickel market players.

2. Initiatives for Recycling: Employing nickel recycling methods as environmental consciousness grows opens doors for suppliers of recycled nickel. Recycled nickel is increasing in demand because government policies and incentives support the idea of a circular economy.

Nickel Procurement Market Segmentation

1. Application: According to the application, the nickel procurement market research report segments the market into Stainless Steel Production, Alloy Manufacturing, Plating and Coating, and Battery Manufacturing.

2. End-User Industry: Based on end-users, the nickel procurement market research report classifies the market into Automotive, Aerospace and Defense, Construction, Electrical and Electronics, and Energy and Power Generation.

3. Production Methods: According to the production methods, the nickel procurement market research report divides the market into Laterite Nickel Ores, Nickel Sulfide Ores, and Recycled Nickel.

Regional Outlook of the Nickel Procurement Market

The dynamics of consumer and supplier power that studies the dynamics of trade and supplier and consumer power in the dynamic global nickel market always requires the consideration of regional perspectives on the situation. Supplier power in the nickel market is relatively low in North America because of low production capacity and scarce nickel resources. Nonetheless, supplier power is moderate in the European Union (EU), indicating a more balanced market where suppliers have a limited impact on supply and demand. Meanwhile, supplier power is noticeably strong in Asia, especially in significant nickel-producing nations like Indonesia and the Philippines, due to substantial production capacity and nickel resources.

For the above-specified reasons, the buyer power is low in the North American nickel market, where domestic production is restricted, and the supply needs to be fulfilled by importing the products. Compared to Asia and the EU, buyer power is more robust. Industrial solid demand and a competitive environment that provides them with many options have given buyers great power inside the EU. Analogously, due to the region’s varied industrial sectors and the increasing demand for nickel in developing nations, Asian buyers have plenty of options and bargaining power.

Cost Component in the Nickel Procurement Market

Cost is necessary to understand supply and demand dynamics in the nickel market. Between forty and fifty percent of the total cost structure comprises labor expenses. It shows the significance of labor efficiency and management techniques in obtaining an advantage over competitors in the market. Businesses must invest in technology and streamline operations to maximize labor utilization, reduce costs, and boost profitability.

Pricing Outlook in the Nickel Procurement Market

Examining the macroeconomic variables impacting supply and demand dynamics and the market’s current status is essential for forecasting pricing in the nickel sector. In comparison to the first quarter of 2023, it is predicted that nickel prices on the London Metal Exchange (LME) will drop by 10% to 12%. Due to fluctuating policies and economic instability, China’s declining metal demand is the primary cause of this decline. Consequently, there is expected to be a rapid decline in nickel prices, requiring market players to be cautious.

Engagement Strategies in the Nickel Procurement Market

The growth of cooperation across the nickel market ecosystem can be driven by engagement strategies that support sustainability. Strategies involve all the diverse sets of activities that the organization may apply to build stronger relationships with key stakeholders. Improved communication, collaboration, and the development of a participatory culture among business enterprises within the nickel industry lower their risks, seize opportunities in the market, and are sources of meeting long-term success.

Contract Period in the Nickel Procurement Market

Things like apparent constant variables like supply and demand dynamics, market volatility, and regulatory restrictions will all influence contract lengths in a big way. Long-term agreements will assure stability at the expense of taking full advantage of conditions in a very favorable market. At the same time, short-term contracts are flexible, but they expose parties to variations in price. The optimization of the nickel market rests on a hairline balance of the factors that have to do with risk management within the length of a contract.

Negotiation Factors in the Nickel Procurement Market

In the nickel market, negotiating factors significantly influence the results of business transactions and contractual obligations. These variables can be in terms of sale, payment conditions, delivery dates, requirements for quality, and obligations under contracts, among many other things. Various factors, including supply-demand dynamics, market competition, regulatory restrictions, and geopolitical concerns, may impact the negotiation process.

Leading Players in the Nickel Procurement Market

Some of the leading companies in the nickel market are Lundin Mining Corp., Glencore Canada Corp., Impala Canada Ltd., Karora Resources Inc., Mindoro Resources Ltd., Anglo American plc., BHP Ltd., Eramet, Glencore plc, Boliden AB, KGHM International Ldi, Northern Sun Mining Corp., China Minmetals Corp., Jinchuan Nickel, Tsingshan Holding Group, Sumitomo Metal Mining Co Ltd., Global Ferronickel Holdings Inc., PT Vale Indonesia Tbk., Xinjiang Xinxin Mining Industry Co Ltd., Nickel Asia Corp., BHP Billiton Nickel West Pty Ltd., South32 Ltd., Minara Resources Pty Ltd., Panoramic Resources Ltd., Antofagasta Minerals SA, Atlantic Nickel, Cerro Matoso SA.