Russian miner Nornickel says its consolidated revenue decreased 20% in the first half of 2023, following price declines in all key metals despite higher physical sales of platinum-group metals and gold, Kallanish reports.

Total revenue fell to $7.2 billion in H1. Net income also dropped 20% on-year to $3.2 billion, mostly impacted by the devaluation of the rubble and the decrease in receivables. Cash operating costs declined 12% in the period, while capital expenditure decreased 19% to $1.5 billion.

Nornickel’s president Vladimir Potanin also noted in the company’s H1 financial report that “restrictive measures imposed on Russia” alongside price declines put “a lot of pressure” on the financials. “However, the company successfully managed to re-direct our sales to friendly countries and in H1, our deliveries to Asia increased two-fold accounting for almost 50% of total metal revenue,” he adds.

The miner expects the ongoing nickel market surplus to widen to 200,000 tonnes in 2023 and further to 180,000 t in 2024. “Nickel supply is likely to exceed demand in China and Indonesia in 2023-2024, while Western markets are expected to be fairly balanced because of their reliance on nickel from conventional suppliers,” it adds.

Its H1 nickel production dropped 9% on-year to almost 91,000 t, while the average LME nickel price in the period declined by 12% to $24,205/t.

Copper production remained flat at 203,000 t, but the average price for the red metal fell 11% to $8,703/t, the company says. It described “lukewarm growth” in China in H1, alongside tightening of monetary conditions and global economic slowdown expectations. The period was also affected by mine disruptions in Latin America.

“Economic uncertainty puts pressure on the copper market, but transport electrification, green energy transition as well as lack of new sizeable projects are going to shift the market into structural deficit,” Nornickel says. “Global copper demand is estimated to reach 25.4 million tonnes this year, up 3% on-year. We anticipate that China’s copper use will increase 3% to 14.1m t, while demand in Europe and North America will stay flat at 3.3m t and 2.2m t, respectively.”

The miner’s 2023 production guidance stands at 204,000-214,000 t/y for nickel 353,000-373,000 t/y for copper.