Darren MacDonald
CTV News Northern Ontario Digital Content Producer
@Darrenmacd Contact
@Darrenmacd Contact
Published Friday, July 2, 2021
Adrian Gardner, principal analyst for nickel markets at research firm Wood Mackenzie, told Bloomberg News the strike at Vale in Sudbury could last for several months. (File)
SUDBURY -- A nickel market analyst expects the strike at Vale operations in Sudbury to drag on, as prices for the high-grade nickel produced in the area increases, in part because of the local labour disruption.
According to a story from Bloomberg, the strike is putting pressure on the supply of nickel needed to make batteries for electric vehicles.
"Sudbury is one of the world’s few producers of nickel pellet, a form used to produce alloys for aerospace, electronic and nuclear industries," the story said. "Production at Vale’s northeast Ontario operation halted when unionized workers went on strike on June 1. The disruption is driving consumers to tap battery-grade nickel briquette as an alternative."
That shift is increasing competition for briquette, the main form of nickel stored at LME warehouses. Supply has fallen by nine per cent since a peak in April and are now at the lowest in more than a year, Bloomberg said.
"Battery-grade nickel is a key ingredient in rechargeable batteries for electric vehicles, helping pack more energy into cells and allowing producers to reduce use of cobalt, a more costly metal that typically has a less transparent supply chain," the story said.
"The market for such nickel is expected to be in a tight balance in the next two to three years and could slip into a deficit as early as 2024, according to energy data and analysis firm BloombergNEF."
Members of Steelworkers Local 6500 have been on strike since last month. Issues include benefits for new workers.
Adrian Gardner, principal analyst for nickel markets at research firm Wood Mackenzie, told Bloomberg the strike could last for several months. Vale faced a yearlong strike in Canada back in 2009 and 2010.
Striking workers represented by United Steelworkers Local 6500 have twice rejected a wage offer presented by the Brazilian mining giant this year.
Read the full story here.
Adrian Gardner, principal analyst for nickel markets at research firm Wood Mackenzie, told Bloomberg News the strike at Vale in Sudbury could last for several months. (File)
SUDBURY -- A nickel market analyst expects the strike at Vale operations in Sudbury to drag on, as prices for the high-grade nickel produced in the area increases, in part because of the local labour disruption.
According to a story from Bloomberg, the strike is putting pressure on the supply of nickel needed to make batteries for electric vehicles.
"Sudbury is one of the world’s few producers of nickel pellet, a form used to produce alloys for aerospace, electronic and nuclear industries," the story said. "Production at Vale’s northeast Ontario operation halted when unionized workers went on strike on June 1. The disruption is driving consumers to tap battery-grade nickel briquette as an alternative."
That shift is increasing competition for briquette, the main form of nickel stored at LME warehouses. Supply has fallen by nine per cent since a peak in April and are now at the lowest in more than a year, Bloomberg said.
"Battery-grade nickel is a key ingredient in rechargeable batteries for electric vehicles, helping pack more energy into cells and allowing producers to reduce use of cobalt, a more costly metal that typically has a less transparent supply chain," the story said.
"The market for such nickel is expected to be in a tight balance in the next two to three years and could slip into a deficit as early as 2024, according to energy data and analysis firm BloombergNEF."
Members of Steelworkers Local 6500 have been on strike since last month. Issues include benefits for new workers.
Adrian Gardner, principal analyst for nickel markets at research firm Wood Mackenzie, told Bloomberg the strike could last for several months. Vale faced a yearlong strike in Canada back in 2009 and 2010.
Striking workers represented by United Steelworkers Local 6500 have twice rejected a wage offer presented by the Brazilian mining giant this year.
Read the full story here.
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Analyst senses labour dispute could extend for months
Author of the article: Sudbury Star Staff
Publishing date: Jul 02, 2021 •
Analyst senses labour dispute could extend for months
Author of the article: Sudbury Star Staff
Publishing date: Jul 02, 2021 •
Family and friends of striking USW 6500 members, along with supporters from the local labour community, take part in a rally Wednesday afternoon at the Four Corners. Many of the signs read: "We stand by you, as you fight for them," in reference to the union's concern for the next generation of Vale workers. PHOTO BY JIM MOODIE/SUDBURY STAR
A strike at Vale’s Sudbury operations is taxing a nickel market that’s key to powering electric vehicles.
The job action by USW Local 6500 is now entering its second month, with no new contract talks planned.
Bloomberg News notes that Sudbury is one of the world’s few producers of nickel pellet, a form used to produce alloys for aerospace, electronic and nuclear industries.
Production at Vale’s northeast Ontario operation halted when unionized workers went on strike on June 1. The disruption is driving consumers to tap battery-grade nickel briquette as an alternative.
That shift is increasing competition for briquette, pushing up North American premiums, or extra charges consumers pay on top of nickel prices on the London Metal Exchange, as stockpiles of the metal dwindle, Bloomberg said.
Inventories of briquette, the main form of nickel stored at LME warehouses, have fallen nine per cent since a peak in April and are now at the lowest in more than a year.
“Given the challenges at a number of Class 1 nickel operations over 2021 to date, availability of material for end customer purchases is more limited that might have been thought,” Colin Hamilton, an analyst at BMO Capital Markets, told Bloomberg.
Battery-grade nickel is a key ingredient in rechargeable batteries for electric vehicles, helping pack more energy into cells and allowing producers to reduce use of cobalt, a more costly metal that typically has a less transparent supply chain.
The market for such nickel is expected to be in a tight balance in the next two to three years and could slip into a deficit as early as 2024, according to energy data and analysis firm BloombergNEF.
Bloomberg said that since the Vale strike began, the premium on briquette has risen 24 per cent and U.S. prices on June 22 hit their highest level since November 2019, according to Fastmarkets data.
Nickel for three-month delivery posted an eight per cent weekly gain last week on the London Metal Exchange, the biggest since August 2019.
On Thursday, nickel was selling for US $2.115.
“The strike is not the main driver of nickel price increase, but it will be the main driver on the North American nickel premium increase,” Adrian Gardner, principal analyst for nickel markets at research firm Wood Mackenzie, told Bloomberg.
Gardner said he isn’t optimistic about a solution to the Vale strike and anticipates the labor dispute could extend for many months. Vale faced a year-long strike in Canada back in 2009 and 2010.
Striking workers represented by Local 6500 have twice rejected a contract offer presented by the Brazilian mining giant this year.
Local 6500’s bargaining committee recommended acceptance of a tentative agreement with Vale on May 31, but the membership rejected it.
Vale made a second offer two weeks later, but this time the bargaining team was not in favour and members also voted it down.
The Steelworkers say Vale’s contract offers contained concessions that union members find unacceptable and believe are not needed.
Vale said contract changes are needed to justify new investments that are needed to its Sudbury operations.
Meanwhile, the Brazilian miner this week said it will invest C $150 million ($121.15 million U.S.) to extend current mining activities in Thompson, Man. by 10 years.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” Vale’s executive vice-president for base metals, Mark Travers, said in a statement.
The company said the Thompson Mine Expansion is a two-phase project and the investment announcement represents phase 1. It added phase 1 includes infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution.
Vale expects changes to improve current production by 30 per cent.
The Thompson orebody was first discovered in 1956 by Vale and mining began in 1961.
Vale said it will continue exploration drilling of known orebodies that hold the promise of mining well past 2040.
— with files from Reuters
A strike at Vale’s Sudbury operations is taxing a nickel market that’s key to powering electric vehicles.
The job action by USW Local 6500 is now entering its second month, with no new contract talks planned.
Bloomberg News notes that Sudbury is one of the world’s few producers of nickel pellet, a form used to produce alloys for aerospace, electronic and nuclear industries.
Production at Vale’s northeast Ontario operation halted when unionized workers went on strike on June 1. The disruption is driving consumers to tap battery-grade nickel briquette as an alternative.
That shift is increasing competition for briquette, pushing up North American premiums, or extra charges consumers pay on top of nickel prices on the London Metal Exchange, as stockpiles of the metal dwindle, Bloomberg said.
Inventories of briquette, the main form of nickel stored at LME warehouses, have fallen nine per cent since a peak in April and are now at the lowest in more than a year.
“Given the challenges at a number of Class 1 nickel operations over 2021 to date, availability of material for end customer purchases is more limited that might have been thought,” Colin Hamilton, an analyst at BMO Capital Markets, told Bloomberg.
Battery-grade nickel is a key ingredient in rechargeable batteries for electric vehicles, helping pack more energy into cells and allowing producers to reduce use of cobalt, a more costly metal that typically has a less transparent supply chain.
The market for such nickel is expected to be in a tight balance in the next two to three years and could slip into a deficit as early as 2024, according to energy data and analysis firm BloombergNEF.
Bloomberg said that since the Vale strike began, the premium on briquette has risen 24 per cent and U.S. prices on June 22 hit their highest level since November 2019, according to Fastmarkets data.
Nickel for three-month delivery posted an eight per cent weekly gain last week on the London Metal Exchange, the biggest since August 2019.
On Thursday, nickel was selling for US $2.115.
“The strike is not the main driver of nickel price increase, but it will be the main driver on the North American nickel premium increase,” Adrian Gardner, principal analyst for nickel markets at research firm Wood Mackenzie, told Bloomberg.
Gardner said he isn’t optimistic about a solution to the Vale strike and anticipates the labor dispute could extend for many months. Vale faced a year-long strike in Canada back in 2009 and 2010.
Striking workers represented by Local 6500 have twice rejected a contract offer presented by the Brazilian mining giant this year.
Local 6500’s bargaining committee recommended acceptance of a tentative agreement with Vale on May 31, but the membership rejected it.
Vale made a second offer two weeks later, but this time the bargaining team was not in favour and members also voted it down.
The Steelworkers say Vale’s contract offers contained concessions that union members find unacceptable and believe are not needed.
Vale said contract changes are needed to justify new investments that are needed to its Sudbury operations.
Meanwhile, the Brazilian miner this week said it will invest C $150 million ($121.15 million U.S.) to extend current mining activities in Thompson, Man. by 10 years.
“This is the largest single investment we have made in our Thompson operations in the past two decades,” Vale’s executive vice-president for base metals, Mark Travers, said in a statement.
The company said the Thompson Mine Expansion is a two-phase project and the investment announcement represents phase 1. It added phase 1 includes infrastructure such as new ventilation raises and fans, increased backfill capacity and additional power distribution.
Vale expects changes to improve current production by 30 per cent.
The Thompson orebody was first discovered in 1956 by Vale and mining began in 1961.
Vale said it will continue exploration drilling of known orebodies that hold the promise of mining well past 2040.
— with files from Reuters
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