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The Goro nickel mine, which is one of the world’s largest deposits, is cutting production in 4Q due to leaks from a tailings dam that holds mining waste, according to Bloomberg. The production cutbacks were requested by local authorities. It is unclear how much production will be cut; however, the operation has an annual production capacity of approximately 60,000 mt. The mine is partially owned by Trafigura and backed by Tesla. The Goro nickel mine is on the island of New Caledonia, a French territory off the coast of Australia. At 160,000 mt, New Caledonia was the world’s fourth-largest nickel producer in 2021, according to USGS data. (Source: Bloomberg) |
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Nickel prices finished up about 2% yesterday on this news, continuing a trend that has made it one of the best-performing LME metals in 2022. Even with today's pullback, prices are still up nearly 40% this year, with the last trade on the 3M Select contract at $28,890/mt (7:00 AM CST). However, 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. (11/16/2022) |
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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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11/09/2022: AEGIS Factor Matrices: Most important variables affecting metals prices 11/07/2022: AEGIS Primer on LME Aluminum Price History 10/05/2022: European Aluminum Smelters Might Have Negative Margins Through 2023 8/31/2022: Will Chilean Production Issues Drive Copper Prices Higher? |
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| Important Headlines | ||
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11/15/2022: Column: LME stays Russian metal ban with views starkly split 11/14/2022: Electric vehicle makers burning cash, slammed by sky-high costs 11/14/2022: No surge of Russian metal into LME warehouses-exchange 11/14/2022: Nucor kept December plate prices flat 11/11/2022: LME will not ban Russian metal from its system |
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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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