GMK Noril'skiy nikel' : A report by Nornickel, with financial market analysis from ICBC Standard Bank

Nornickelpresents a biannual review of the nickel and platinum group metals (PGM) markets, prepared by the company's experts in alliance with ICBC Standard Bank.

'This is the result of the efficient work of two expert groups with the strongest industry expertise: the Nornickel team has analyzed the metals fundamental indicators, and the ICBC analysts - the financial part. The result of this cooperation is a comprehensive analysis of the international metals market, which will be useful for all professionals working in this industry.' - said Anton Berlin, Nornickel Marketing director and the Nickel Institute (world association of leading primary nickel producers) Board of Directors chairman.

The experts analyze how key economic and political events have affected the metals markets this year.

Among them - the escalation of the trade war between the United States and China, the tightening of environmental regulations in the US, Europe and China, the impact of electrification on nickel and PGM demand.

The research gives a medium term market forecast.

In particular, it predicts a significant deficit in palladium in 2019. It is likely to amount to 1.3 mln troy ounces, which is the highest rate since 2000.

The current platinum surplus, which was triggered, among other factors, by a reduction in the share of cars with diesel engines, may decrease next year. Moreover, as experts say, the growth of investment demand for this metal can turn the current surplus into deficit.

The explosive growth in e-vehicles production provoked a rise in nickel prices up to June 2018. However, the escalation of the trade war between China and the US led to a correction in nickel prices - the investors began to reduce investments in the base metals exported by China.

Meanwhile, the experts believe the negative impact of the trade war on the fundamental factors of the nickel market will be limited. Furthermore, the analysts forecast the risk of nickel deficit after 2022. It might be triggered by the likely ban on the unprocessed nickel ores export in Indonesia. An expert analysis of 88 possible and probable projects have shown that the majority of them are doomed to remain on paper and even projects with higher chances of implementation would require incentive prices significantly above the current spot levels. This demonstrates that the structural deficit in nickel will persist in the medium term.

The Commodity report is available on the Company's website here: https://www.nornickel.com/upload/iblock/1b3/Quintessentially_Ni_and_PGMs.pdf