Russia’s Nornickel, the world’s largest producer of palladium and a significant refined nickel producer, reported a 1% decrease in nickel output for the first half of the year. However, the company has confirmed it will maintain its 2024 production guidance for both metals.
Nornickel’s full-year nickel production forecast remains between 184,000 and 194,000 metric tons, down from 209,000 metric tons in 2023. The palladium production guidance for 2024 is set at 2.296 to 2.451 million ounces.
The decline in nickel output is attributed to furnace repairs at the Nadezhda smelter. Chief Operations Officer Alexander Popov stated that the completion of these repairs, along with the overhaul of the converter electric furnace and related equipment, will enhance the reliability of their industrial assets.
Although Nornickel is not directly subject to Western sanctions, the company faces challenges as many Western firms avoid dealings with it. This situation has delayed approximately 30 billion roubles ($347 million) in repairs for two years due to difficulties in sourcing equipment and technology previously supplied by Western companies. The repaired furnace is expected to resume operations in early August, indicating that Nornickel has found alternative suppliers, though no details were provided.
In April, the U.S. and Britain imposed bans on their metal-trading exchanges from accepting new nickel, aluminum, and copper produced by Russia, further complicating Nornickel’s operations and contributing to price volatility and supply uncertainty. Despite these challenges, the company has committed to fulfilling all contractual obligations.
To adapt to the changing landscape, Nornickel is shifting its focus towards China and other non-Western markets for technology and sales opportunities. The company is exploring options to relocate its copper smelting operations to China, establish a nickel plant for the battery sector there, and build a platinum group metals refinery in Bahrain.
Nornickel reported that its palladium production remained stable in the first half of 2024, while platinum output saw a 3% decline.