Russia’s Norilsk Nickel (Nornickel), the world’s largest producer of palladium and a significant refined nickel supplier, announced on Friday its intention to sell all of its production in 2025, despite facing challenging conditions in the metals market.
Key Highlights:
Market Context:
Nornickel is not directly subject to Western sanctions, but restrictions against Moscow have led many Western companies to avoid purchasing Russian metals, complicating payment processes. As a result, Nornickel has shifted its sales focus to Asia.
The London Metal Exchange (LME) has banned deliveries of newly produced Russian aluminium, copper, and nickel to LME-registered warehouses, aligning with U.S. and UK sanctions aimed at disrupting Russian export revenues.
Financial Performance:
The company reported a 22% decline in first-half profits in August, attributed to low nickel and palladium prices, logistical challenges, and cross-border payment issues.
Despite these difficulties, Nornickel expects to sell its entire metal production in 2025, although it anticipates that market conditions will remain tough, particularly in the nickel sector, which is projected to be in surplus.
Production Outlook:
Nornickel did not provide specific production forecasts for 2025 but noted a surplus of 150,000 metric tons in the global nickel market for both 2024 and 2025.
In October, the company raised its production guidance for 2024, forecasting nickel output between 196,000 and 204,000 metric tons and palladium production between 2.624 million and 2.728 million ounces.
Investment Plans:
The company’s board approved a 215 billion rouble ($2.1 billion) budget for 2025, emphasizing the importance of maintaining financial stability.
Nornickel did not disclose investment volumes for 2024 but previously reduced its investment plan for the current year from $3.6 billion to $3 billion due to exchange rate fluctuations and sanctions affecting its projects.