×
Enjoying ad-free content?
Since July 1, 2024, we have disabled all ads to improve your reading experience.
This commitment costs us $10,000 a month. Your support can help us fill the gap.
Support us
Our journalism is banned in Russia. We need your help to keep providing you with the truth.

Norilsk Expects Metals Prices to Fall

Norilsk Nickel is planning for a decline of about 17 percent in nickel prices and 13 percent in copper from last year's average in London, according to two people with knowledge of the matter.

Norilsk has used an average price of about $19,000 a ton for nickel and $7,700 a ton for copper in its 2012 budget, the people said Friday, declining to be identified because the information is confidential. The board approved the budget at the end of December, they said.

Nickel, used in stainless steel, accounts for about 50 percent of Norilsk's revenue, and copper, prized for its conductivity, contributes 25 percent. Earnings before interest, taxes, depreciation and amortization may slump 25 percent this year to $4.4 billion, Deutsche Bank estimated on Jan. 5.

Prices aren't "critically" low for Norilsk, chief executive Vladimir Strzhalkovsky said on Rossia 24 state television Thursday. "Rational conservatism is always better than immoderate optimism and fantasy-building."

The company expects a "slight" reduction in output in Russia this year, Strzhalkovsky said. Norilsk's nickel and copper output have fallen as its mines age, while the company seeks to build new facilities.

Alisa Fialko, a Norilsk spokeswoman, declined to comment on the company's forecasts.

Nickel may average $20,500 a ton this year, and copper may fall to $8,465, according to median estimates of analysts surveyed by Bloomberg. Last year, prices averaged $22,865 and $8,826, respectively, on the London Metal Exchange. Nickel has slumped by more than 30 percent from last year's peak in February, and copper prices have dropped 18 percent.

"Current prices still allow the majority of nickel and copper producers to turn a profit," Kirill Chuyko, an analyst for UBS, said Friday.

Norilsk sees nickel prices advancing to $30,000 by 2025, with copper, the second-biggest contributor to the company's revenue, surging to $11,300, according to the October strategy.

… we have a small favor to ask. As you may have heard, The Moscow Times, an independent news source for over 30 years, has been unjustly branded as a "foreign agent" by the Russian government. This blatant attempt to silence our voice is a direct assault on the integrity of journalism and the values we hold dear.

We, the journalists of The Moscow Times, refuse to be silenced. Our commitment to providing accurate and unbiased reporting on Russia remains unshaken. But we need your help to continue our critical mission.

Your support, no matter how small, makes a world of difference. If you can, please support us monthly starting from just $2. It's quick to set up, and you can be confident that you're making a significant impact every month by supporting open, independent journalism. Thank you.

Once
Monthly
Annual
Continue
paiment methods
Not ready to support today?
Remind me later.

Read more