The headline figures showed yet another decline in Glencore’s nickel production. In the first three quarters of 2024, the company produced 62,300 tonnes of nickel, down by 8.92% from the 68,400 tonnes produced over the corresponding period in 2023.
The reason for the fall was the continuing consequences of the company’s decision to put the Koniambo nickel mine in New Caledonia into care and maintenance. This decision was taken in February so it will weigh on the 2024 production results.
Those results showed that Koniambo’s shutdown meant that the company has reduced its production of nickel by 14,800 tonnes so far in 2024, compared with the first three quarters of 2023. But that was compensated by higher production from the Murrin Murrin operation in Australia, up by 3,100 tonnes.
That might seem a small amount, but it could have a significant effect on the market, given that Murrin Murrin is one of only five briquette producers in the world following BHP’s decision to suspend operations at its Nickel West asset in Western Australia.
Output from two of the other producers, Ambatovy and Impala, was limited or facing challenges. The remaining two, Norilsk and Sherritt, were directly or indirectly subject to international trading sanctions, restricting the sale of their material in the US.
“The increase in production at Murrin Murrin was mostly because of scheduled major maintenance in the previous year,” Fastmarkets analyst Olivier Masson said. “Despite nickel’s oversupplied fundamentals, the increase in Murrin Murrin’s output should be welcomed by the market because it is now the sole producer of IRA-compliant briquettes because Nickel West is going on care and maintenance.”
The Inflation Reduction Act (IRA) in the US places significant regulatory burdens on imported materials.
On October 29, Fastmarkets assessed the nickel briquette premium, delivered Midwest US, at 45-50 US cents per lb, up by 11.76% from 40-45 US cents per lb the week before.
Total zinc production falls by 4%
Glencore produced 643,600 tonnes of zinc concentrates in the first three quarters of 2024, down by 4% from 672,100 tonnes in the corresponding period last year. This decrease was partially attributed to lower output from Antamina, the largest mine in Peru.
Attributable zinc production at Antamina was 62,700 tonnes in the first three quarters of this year, down year on year by 47% from 119,200 tonnes.
The company attributed the overall decrease in zinc concentrate production to the temporary halting of operations at the McArthur River mine in Australia in March, due to heavy rainfall.
But production continued to ramp up at the Zhairem mine in Kazakhstan during the third quarter of 2024.
Zinc concentrate production in the first three quarters of 2024 was 158,200 tonnes, up by 32% from 119,400 tonnes in January-September last year.
Lead concentrate production during the same period was 27,100 tonnes, up by 9% from 24,800 tonnes year on year. Both increases were attributed to the ramping-up of Zhairem.
This came with the zinc concentrate market facing a continued shortage of raw materials, putting downward pressure on treatment charges (TCs).
Fastmarkets’ twice-monthly assessment of the zinc spot concentrate TC, cif China, was $(50)-(20) per tonne on October 25, its lowest level since September 2014.
Glencore produced 669,800 tonnes of refined zinc in the first nine months of 2024, up by 23% year on year from 545,800 tonnes.
This increase was partially due to the restart in February of the Nordenham smelter in Germany.
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