Days after Core Lithium (ASX:CXO) shares tanked following its NT mine closure, Panoramic Resources (ASX:PAN) has issued a similar announcement.
Panoramic’s Savannah nickel project is being mothballed indefinitely.
“[Despite] a shipment of 10,000 tonnes of nickel concentrate on 3 January 2024, nickel prices have continued to trend lower,” the company wrote in a late-night release overnight.
“After engagement with major creditors, key suppliers and other stakeholders, [FTI] have determined that operations at Savannah will be suspended.”
Shares suspended, now operations
Panoramic shares have been suspended since November 2023 when the company first faltered.
Per the last day the stock traded, 1Y returns for Panoramic holders were down 82.05 per cent.
By December last year, the company had gone into voluntary administration.
Panoramic had more bad news overnight. It’s going to sack more than 100 workers per the decision of its administrators, FTI Consulting.
Commodity prices to blame
When one zooms out, most major hard metal commodities are suffering right now.
On December 19 2023, 1Y returns on the following commodities reflected a bleak scenario.
- Lithium prices down 82.83 per cent
- Coal prices down 63.93 per cent
- Titanium prices down 36.11 per cent
- Cobalt prices down 43.92 per cent
- Nickel prices down 39.92 per cent
- Rhodium prices down 64.02 per cent
- Neodymium prices down 39.68 per cent
- Urea ammonium prices down 55.00 per cent
But lithium prices are down more than 80 per cent year on year, don’t forget to spare a thought for nickel bulls.
As massive leaps were made in nickel production capacity by Indonesia in the 2020s, suddenly, the world was flush.
Indonesian nickel production was over one million tonnes in both 2021 and 2022 – that latter year the country’s all-time high.
Macquarie Bank Commodity Strategy Consultant Jim Lennon last year told an industry conference that Indonesia currently supplies some 55 per cent of the world market.
That number is expected to continue growing, and Mr Lennon isn’t alone in his sentiment.
CRU Group Shanghai Analyst Ellie Wang last earlier put forward her view that the Indonesian nickel supply is largely why we won’t see a nickel surplus until 2028.
Coincidentally, 2028 is when Benchmark Minerals Intelligence (BMI) expect the lithium price to recover, too.
BMI has also weighed in on nickel’s performance of late, noting a seven per cent increase in demand through 2023 wasn’t enough to lift prices.
And the price has fallen further since December 19 2023, the date I used in listing commodity prices above.
Compared to this time last year, nickel prices are down more than 42 per cent on the London Metal Exchange (LME).
Not a fantastic start to the year for Australian battery metal thematic bulls.