Nornickel has reduced its 2023 guidance owing to scheduled maintenance at the Nadezhda Metallurgical Plant.

Russia-based Nornickel, the world’s largest producer of palladium and high-grade nickel, has announced that its nickel production will fall this year owing to planned maintenance at the Nadezhda Metallurgical Plant. Guidance has now been revised to 204-214kt Ni.

At the same time, Nornickel revealed it had recorded production of 219kt Ni last year, which was higher than its initial guidance of 205-215kt Ni. This is largely because repairs to the flash smelting furnace #2 at Nadezhda Metallurgical Plant were delayed to 2023. Nornickel’s output has fluctuated in recent years with 2021 negatively impacted by the flooding and subsequent partial suspension of its Oktyabrsky and Taimyrsky mines.

The Nadezhda smelter processes PGM-Ni-Cu-Co concentrate from the Talnakh and Norilsk concentrators into PGM-Ni-Cu-Co matte. The plant is part of the Nornickel Polar Division in Arctic Russia and all matte is sent to Monchegorsk, Russia, and Harjavalta, Finland, for onward refining into high-grade nickel products.

Although Western sanctions on Russia due to the Ukraine war have not directly targeted Nornickel, the company’s President Vlodimir Potanin admitted they have limited its capabilities, both financially and in terms of developing traditional markets. As such, it aims to build closer ties with countries including China, Turkey and Morocco.

Even though the nickel market remains in surplus, much of this is in the form of low-grade nickel, mainly nickel pig iron (NPI), which continues to ramp up from existing and greenfield capacity in Indonesia. In contrast, the high-grade market remains very tight, with exchange stocks being reduced to multi-year lows. Nornickel’s development will only exacerbate such high-grade tightness.