The document summarizes the global nickel industry. It states that: - Primary nickel production recovered in 2010 after declining in 2008-2009 due to the economic crisis, and has been growing since then at a rate of around 9% per year. - Europe and Asia are the leading producers and consumers of nickel globally, accounting for over 70% of production and consumption in 2012. - Stainless steel production, which requires nickel, is the largest end use for nickel and accounted for around 66% of total nickel consumption in 2012. - Future demand is expected to come from growth in stainless steel production and from nickel-based batteries and superalloys, however oversupply and lack of demand pose challenges to the industry

1. Global Nickel Industry
All rights reserved. This publication
is protected by copyright. No part
of it may be reproduced, stored in
a retrieval system or transmitted, in
any form or by any means, electronic
mechanical, photocopying, recording
or otherwise without the prior written
permission of the publisher.

2. Overview
Global nickel industry was supported by the world
economic growth until 2007 with rising production
of primary nickel metal. However, economic crisis
affected the worldwide nickel production in 2008 &
2009 and production declined to 1.32 Million Metric
Tons in 2009.
In 2010, primary nickel production recovered rapidly
to 1.45 Million Metric Tons and since then the pro-
duction is growing continuously. It is estimated that
production will reach around 1.86 Million Metric Tons
by the end of 2013, growing at a CAGR of around
9% during 2010-2013.
Nickel production is anticipated to grow at a
CAGR of around 6% during 2013-2017 with
opening of more mines leading to more nickel
production.
Europe and Asia are the leading regions for the
nickel production across the world. In 2012, both
the regions accounted for more than 70% of the
total global primary nickel production.
2012 2013e
1.76
1.86
1.97
2.09
2.21
2.34
2014f 2015f 2016f 2017f
Source: International Nickel Study Group (INSG), RNCOS
Note: e/f = RNCOS Estimation/Forecast
Figure 1: Global Primary Nickel Production (Million Metric Tons), 2012-2017
Source: INSG
Note: Data is estimated
Figure 2: Global Primary Nickel Production
by Region, (%), 2012
Europe
AmericaAfrica
Oceania
Asia
16.9%
10.1% 2.4%
41.4%
29.2%

3. Nickel Consumption
In future, with rising stainless steel production, nickel
consumption is anticipated to grow at a CAGR of around
6.7% during 2013-2017.
Like production, Asia and Europe also account for high-
est nickel consumption in the world. In Asia, the primary
nickel consumption is more than its production leading to
imports from other countries. In 2012, Asia accounted for
more than two-third of the global primary nickel con-
sumption, followed by Europe and Oceania.
Since 2010, primary nickel consumption is also increasing
continuoulsy and reached 1.65 Million Metric Tons in 2012.
However, the nickel consumption is less than the produc-
tion, leading to surplus due to lack of demand for the metal.
Source: INSG, RNCOS
Note: e/f = RNCOS Estimation/Forecast
Figure 3: Global Primary Nickel Consumption (Million Metric Tons), 2012-2017
2.02
2.16
2.29
1.89
1.77
1.65
2012 2013e 2014f 2015f 2016f 2017f
Source: INSG
Note: Data is estimated
Figure 4: Global Nickel Consumption by
Region (%), 2012
66.5%
21.6%
1.5%0.2%
10.2%
Europe
AmericaAfrica
Oceania
Asia

4. Nickel, through its various uses, plays a large part in
the development of capital infrastructure in economies
worldwide. The metal is widely used in aerospace,
architectural, consumer, industrial, marine, military and
transport applications. The manufacturing of stainless
steels accounts for about 66% of nickel use, followed by
non-ferrous metal products (12%) ands plating (7%).
Figure 5: Global Nickel Use by Sector (%), 2012
Source: Metal world
Stainless Steel
Plating
Other Alloy Steels
Non-ferrous Metal Products
Steel CastingsMetal Products
Other Uses
12%
7%
4%
5%
6%
66.5%

5. • Stainless steel production - Stainless steel accounts for the highest nickel consumption and
accounted for around 66% of the total nickel use in 2012
• Nickel consumption in China - China accounts for around half of the world’s nickel con-
sumption and in 2012, consumption rose 19% compared to the previous year.
• Technological transformation - To reduce production cost, the nickel players are focusing
on technology transformation for nickel production that will help them to increase their produc-
tion at low cost.
• Government support - The global regulatory sentiment saw an increased emphasis on en-
hancing nickel mine and NPI production. For instance, Brazil’s northern state of Para has reduced
the extraction tax on mining activity from three UPF’s (Standard tax unit) to one UPF for each
extracted tonne of ore. Similarly, government of Inner Mongolia (China) has announced discounts
on electricity fees for NPI producers in the region.
Market Driving Factors

6. Nickel-based battery
Nickel-based battery market is likely to cross US$ 7.5 Billion by end of 2017 which will increase
the nickel usage in future. This will be driven by rising demand for portable computers, electronic
devices, medical equipments and electric vehicles.
Nickel-based super alloys
Strong growth in demand for nickel alloys from aerospace industry (23% forecast increase in airline
deliveries, 2012-2020), power generation and oil & gas markets.
Growth in Construction Market
Global construction output is anticipated to grow from US$ 8.7 Trillion in 2012 to US$ 15 trillion by
2025. This will create the demand for stainless steel which in turn will create the demand for nickel.
Opportunities
Opportunities & Challenges

7. Volatility in Prices
In 2012, the nickel market largely underperformed with price for the metal having slumped by 30%
in the middle of the year. So far it looks like this year (2013) will not be better either, as prices have
fallen 19% till August, 2013. Prices are down 38% at from the peak of US$ 22,150 per Metric Ton
last year, trading close to four-year lows due to too much supply and limited demand.
Lack of Demand
The gradual slide in nickel demand is due to number of factors including the fact the Chinese aren’t
purchasing as much nickel. That’s because China’s economy is slowing as their biggest customers,
the US and Europe, are trying to claw their way out of financial problems.
In China, the use of stainless steel scrap by consumers is increasing which is affecting the primary
nickel demand.
The economies in the US and Europe are also stagnating, impacting demand for nickel. At the same
time, large mining companies around the world are bringing new mines on line, which is adding to
the supply surplus.
Production from nickel mines is set to outstrip global demand for the second year in a row. Inven-
tories of nickel in warehouses have increased by 85% in the past year to a record high, painting a
bearish picture for nickel demand.
Product Substitution
In Europe & North America, nickel scrap units are replacing primary nickel in not only stainless steel,
but also in alloyed steel and high nickel alloys where possible.
In China, Nickel Pig Iron (NPI) is replacing primary nickel and to some extent stainless steel scrap
due to cost and easy availability.
Similarly, in India, nickel scrap units are increasing faster than primary nickel in stainless steel.
Tax System in Indonesia
Indonesia enacted an export tax system, effective from May 6, 2012, under which a 20% export
tax is levied on 14 raw ores of Indonesia origin, including nickel, with an exception for miners that
plan to build local processing facilities.
This final move will devastate the supply of laterite nickel ore in China and drive the nickel price
dramatically upward.
Challenges

8. Global nickel industry future is facing tough time as companies continue to re-evaluate their existing
projects and options. Some nickel miners have formally announced that they are cutting production or
capacity, while others have already reported significant asset impairment charges. Technical issues, high
capital costs and lower nickel prices are principal reasons for the current situation.
However, the industry has been focusing on developing projects of very large size to earn economies of
scale. As such, the projects are experiencing significant technical difficulties. All these factors are con-
tributing to high capital costs. The companies need to reduce their production of the metal due to lack
of demand. If such reductions take place, and the excess supply in the market is cornered, nickel may
stand a chance of avoiding a performance as disappointing as last year’s.
With recent concerns expressed by producers on falling nickel prices, and gradual announcements of
cuts in production and the consumption is affecting the future growth of the industry.
However, it is expected that consumption is expected to grow due to an increased demand for stainless
steel in the emerging economies of China, India and Asian countries in the coming years. Expansion of
urban infrastructure, housing developments and ongoing industrialization and urbanization is expected
to result in increased demand.
Moreover, nickel based alloys and batteries will create demand for the metal and support the future
growth of the industry.
Future Outlook

9. MMC Norilsk Nickel
Vale SA
Jinchuan Group Ltd
Xstrata Plc
BHP Billiton Ltd
Sumitomo Metal Mining Co
Eramet SA
Anglo American Plc
Major Nickel Producers
Figure 6: Global Top Ten Refined Nickel Producers, (%), 2011
Source: CRU Group
OAO GMK Norilsk Nickel 286
Vale SA 206
Jinchuan Group Ltd 127
Xstrata Plc 106
BHP Billiton Ltd 83
Sumitomo Metal Mining Co 65
Eramet SA 54
Anglo American Plc 48
Sherritt In ternational Corp 35
Minara Resources Ltd 30
Company Production (‘000 Metric Tons)

10. Looking for an in-depth study
Our Proposition
Our offerings
RNCOS is a leading Business Consultancy firm helping its clients to enter new geographies and in attaining
growth by developing market strategies for them.
We understand your immediate needs and your long-term goals and objective and work with you on how to accom-
plish them.
RNCOS blends the best of strategy consulting with the best of market research to provide organizations with accu-
rate, succinct answers to their most important business questions.
Critical questions that businesses need to
address:
• Where should you set up your business?
• Who should be your distributors?
• What is the current market structure & size?
• Who should be your customers?
Market Insights
Identification Competitive Assessment
• What is the market size
• Structure of the market
• Who are buyers
Product Segments
• Similar products in the market
• Features, attributes & market
share of these products
• Customer preferences
• Price range of these products
• Most suitable distributors and
channels for your business.
• Analyzing their strength, credibility.
• Financial & strategic analysis of
existing competition
• Acceptance level among customers
GROWTH PARTNER
We help you make informed decisions
through the practical application of re-
search, hand holding you to your success…

11. MARKETING TEAM
RNCOS
E mail: marketing@rncos.com
Website: www.rncos.com
Phone: +91 120 4224700 /01 / 02/ 03
For more information on how we can work with you, contact