Australia's nickel mine production is set to fall 11% year on year to 215,000 mt in the current 2013-14 fiscal year and refined nickel production to rise 2.2% to 138,000 mt, the country's Bureau of Resources and Energy Economics forecast in its March quarterly report this week.
BREE forecast mine production to fall to 203,000 mt in fiscal 2014-15 before an uptick in global nickel prices and the start-up of new mines in three states start to boost output. Australia's fiscal year runs July-June.
Nickel mine production is forecast to rebound to 209,000 mt by fiscal 2018-19, and refined nickel production to retreat to 134,000 mt.
Australia's nickel exports in fiscal 2013-14 are forecast to fall 13% year on year in line with the decline in production to 221,000 mt, and to fall further next year to 215,000 mt.
However, the forecast increase in mine production from fiscal 2016-17 will see exports rebound to 219,000 mt in fiscal 2018-19, BREE said.
Global production of refined nickel is forecast to fall 7% year on year to 1.81 million mt in calendar 2014, and global consumption of nickel rise 2.3% to the same level, 1.81 million mt, which is unlikely to impact stocks of refined nickel.
Prevailing high nickel stocks will push global prices down 2% year on year to $14,849/mt in calendar 2014, according to BREE's forecast. However, prices are expected to recover to around $16,600/mt in 2015 as a supply deficit emerges due to consumption rising to 1.84 million mt, BREE said.
It forecast global nickel consumption to reach 1.92 million mt by 2019, and prices to average $17,000/mt over 2016-2019.
"This assumes the Indonesian export ban [introduced in January] will remain in place. If the ban is reduced in severity or removed, there is an upside risk to Indonesia's mine output. Subsequently this would affect China's NPI production rates and place further downward pressure on world nickel prices," BREE said in the report.
Australia is the world's fourth largest producer of nickel.
