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Nickel experienced a significant rally in April, with three-month metal reaching its highest traded value since September 2023 at US$ 19,775 per tonne. Nickel has surged 15% since the beginning of 2024, demonstrating the strongest performance after tin and copper.

However, the market faces challenges, particularly from low-cost Indonesian production, leading to closures or capacity limitations among operators. BHP Group has reported that 30% of Australian mine capacity is offline and with another 30% at risk, further impacting the market. Despite this, Fastmarkets predicts a surplus of 170,000 tonnes for 2024, with expectations of the surplus persisting until 2027, fuelled partly by Indonesia’s continued production boom.

At the time of writing, nickel has moved to US$ 18,500 per tonne in response to unchanged interest rates, with stubborn inflation still affecting Western economies. Sanctions on Russian metal trading have also influenced market dynamics.

The LME is fast-tracking applications from new Chinese producers, with five new brands representing 92,000 tonnes of annual capacity listed in the last six months. Chinese nickel in the LME climbed from zero in August 2023 to 6912 tonnes in March 2024, reflecting China's increasing presence in the market.

Transportation disruptions persist owing to the Red Sea crisis as Houthi rebels target merchant vessels, leading to the rerouting of ships around Africa. This has resulted in longer shipping times and higher costs, with vessels passing through the Red Sea en route to the Suez Canal experiencing insurance price hikes of 250%.

Despite challenges, demand for superalloy scrap remains strong, driven primarily by the aerospace sector’s efforts to address ongoing supply chain issues. INCO 718 and 625 continue to be in high demand, reflecting the industry’s need for new parts.

Cobalt prices are declining owing to oversupply. Meanwhile, interest is growing in the deep-sea mining of metals such as cobalt, nickel and copper, with estimates valuing reserves in trillions of dollars.

Aviation news has highlighted significant engine problems - particularly with PW1000 GTF engines - leading to the grounding of up to 650 aircraft worldwide for inspections and part replacements, with lengthy turnaround times for repairs. CFM has also experienced teething problems with the LEAP-1A and 1B engines, ranging from production defects to cases of premature wear.

Boeing’s commercial aircraft business continues to struggle against Airbus, facing scrutiny and quality issues with its 737 MAX and 787 Dreamliner models, compounded by Federal Aviation Administration oversight and safety concerns.

Boeing has announced the intention of purchasing Spirit and re-integrating it to eliminate travelled work, but this could prove troublesome as Spirit is also a major aerostructure supplier to Airbus. Boeing is looking to adopt a “quality over quantity” approach which will inevitably create a ripple effect on scrap demand for nickel alloys, Ni/Co alloys and titanium, perhaps for the remainder of 2024.