1

2

Economic Scenario

7.98.5

5.2 5.5

6.4

7.48.0 8.3

7.0

6.1

5.0

7.98.5

5.2 5.5

6.4

7.48.0 8.3

7.0

6.1

5.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

In %

2.20% 4.60%

-18.30%

-57.60%

-33.90%

-15.80%-10.40%

-70.0%

-60.0%

-50.0%

-40.0%

-30.0%

-20.0%

-10.0%

0.0%

10.0%JAN'20 FEB'20 MAR'20 APR'20 MAY'20 JUN'20 JUL'20

-23.92-22.1

-18.9-17.1

-11.9

-30

-25

-20

-15

-10

-5

0

INDIA UK FRANCE ITALY GERMANY

India - Annual GDP Growth rate (%)

-30

-20

-10

0

10

20

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

2015 2016 2017 2018 2019 2020

In %

India - QOQ Growth rate (%)

Industrial Output (%) Drop in GDP Growth Quarter I (%)

In %

In %

Stainless Steel, The Fastest Growing Metal

3

CAGR from 1980 onwards

5.33%

3.71%

2.58%

2.49%

2.05%

2.00%

0.00% 1.00% 2.00% 3.00% 4.00% 5.00% 6.00%

STAINLESS STEEL

ALUMINIUM

COPPER

CARBON STEEL

ZINC

LEAD

Average – 2.56%

Region wise Stainless Steel Production Trends (In ‘000 MTPA)

4

CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 CY 2019CY 2019

(H1)CY 2020

(H1)

Asia 21497 22937 24926 28493 31097 31167 34335 37352 40706 42911 20754 18965

Europe 7488 7559 7458 7142 7243 7153 7274 7374 7383 6797 3739 3141

Africa 478 444 505 499 481 529 587 577 550 471 275 180

America 407 404 390 423 425 401 451 411 426 331 180 152

CIS 218 249 217 195 174 165 162 167 164 170 84 71

0

10000

20000

30000

40000

50000

60000

Pro

du

ctio

nCIS America Africa Europe Asia

~ 8.6% Drop from Previous

Year H1

CAGR Growth @ 5.96%

Top SS Producers wise Production Trends (In ‘000 MTPA)

5

CY 2010 CY 2011 CY 2012 CY 2013 CY 2014 CY 2015 CY 2016 CY 2017 CY 2018 CY 2019CY 2020

(H1)

China 12415 14091 16087 19448 21666 21564 24247 26149 27563 30612 13517

India 2120 2271 2470 2680 2973 3209 3436 3590 4022 3723 1502

Japan 3427 3256 3132 3175 3331 3062 3093 3168 3244 2963 1289

Korea (S.) 2012 2116 2131 2109 2018 2224 2273 2390 2415 2237 1149

Indonesia 0 0 0 0 0 0 23 680 2290 2378 1091

Taiwan 1523 1203 1106 1081 1108 1108 1263 1376 1172 997 416

Rest of World 8591 8657 8569 8259 8323 8248 8474 8529 8524 7769 3544

0

10000

20000

30000

40000

50000

Rest of World Taiwan Indonesia Korea (S.) Japan India China

Incr

easi

ng

urb

aniz

atio

n I

n A

sian

Cou

ntr

ies

lead

ing

to

CA

GR

of

ore

than

8%

Gro

wth

Tre

nd

lik

ely

to

Co

nti

nu

e…

Country wise SS Production Trends (In ‘000 MTPA)

6

30612

3723 2963 2237 2378997

7769

0

5000

10000

15000

20000

25000

30000

35000

CHINA INDIA JAPAN KOREA (S.) INDONESIA TAIWAN REST OF WORLD

CY 2010 CY 2018 CY 2019 CY 2020 (H1)

Indonesia adding most from newly installed Capacities

Indian Stainless Steel Production Trends (In ‘000 MTPA)

7

843

34363590

4022

3723

1502

3755

0

500

1000

1500

2000

2500

3000

3500

4000

4500

Indian Stainless Steel Manufacturing has grown at a CAG Rate of more than 8% from 2000 onwards

Ex

pected

Indian Melt Production & Mill Consumption (In ‘000 MTPA)

8

3.4363.59

4.022

3.723

2.947 2.944

3.239

3.55

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

CY 2016 CY 2017 CY 2018 CY 2019

Melt Shop Production Consumption

9

Stainless Steel End-Use: World Vs India

35%

23%

18%

10%

14%

63%13%

6%

9%

9%Consumer Goods

Process Industry

Architecture, Building& Construction

Automobile &Railway

Others

Per Capita Consumption :World Avg. - 5.6 KgChina - 14.1 KgIndia - 2.5 Kg

Lesser Per Capita Stainless Steel Consumption opens wide room of opportunity for Stainless Steel Industry Growth

World(Outer Circle)

India(Inner Circle)

10

Current Trade Remedies / Ongoing Investigations

Anti Dumping duties*Product Countries against whom initiated Duty range in USD/MT

Hot Rolled Flat Products of Stainless Steel of ASTM Grade 304 (width upto 1650mm)

China, Korea & Malaysia 180- 316

CRSS of all widthsChina PR, Korea, European Union, South Africa, Taiwan, (Chinese Taipei), Japan, Thailand and USA.

ADD as percentage of the landed value of imports ranging from 5.39% to 57.39%

Countervailing DutyProduct Countries against whom initiated Duty range in USD/MT

Imports of stainless steel flat products China 18.95% (valid until 2022)

*Both the ADD measures have been extended upto Dec 2020 owing to the COVID pandemic

Cases under investigation Trade remedial measure Product range Countries

Anti Dumping Duty (ADD) Stainless steel flat products

China PR, Korea RP, European Union, Japan, Taiwan, Indonesia, USA, Thailand, South Africa, UAE, Hong Kong, Singapore, Mexico, Vietnam and Malaysia

Countervailing Duty (CVD) Stainless steel flat products Indonesia

11

Country / Region wise Scrap Ratio (In ‘000 Metric Tons)

0

200

400

600

800

1000

1200

1400

CHINA INDIA JAPAN INDONESIA EUROPE N AMERICA S KOREA TAIWAN

Primary SecondaryN

ick

el C

on

sum

pti

on

in

Pri

ma

ry

& S

eco

nd

ary

fo

rm

China being the largest producer of primary Ni Viz. Pure Ni, Fe Ni, NPI etc., Mostly uses primary source of

Nickel for SS Production

Scrap Ratio for Top SS Producing Countries

CountryPrimary Ni

(Pure Ni, Fe Ni & NPI)Secondary Ni

(Scrap)

N America 21% 79%

India 33% 67%

Europe 34% 66%

Japan 47% 53%

S Korea 53% 47%

Taiwan 59% 41%

China 78% 22%

Indonesia 94% 6%

RoW 61% 39%

1212

I

13

MARKET LEADERSHIP THROUGH INNOVATIVE

TECHNOLOGY AND STATE OF ART PRODUCTION FACILITIES

RANKED AMONGST THE TOP TEN STAINLESS STEEL

COMPANIES IN THE WORLD WITH THE CAPACITY OF

1.9 MILLION TONNES

OVER 14,000 EMPLOYEES WORLDWIDE.

4 MANUFACTURING LOCATIONS, 25+ SALES

OFFICES,6 SERVICE CENTERS

INDIA’S LARGEST INTEGRATED STAINLESS STEEL MANUFACTURER

A GLIMPSE

14

OVERSEAS NETWORK

I n t e r n a t i o n a l Sa l e s O f f i c e s

M a n u f a c t u r i n g Fa c i l i t i e s

USA

Indonesia

Belgium

Spain

South Korea

Russia

Vietnam

UAE

Brazil

Singapore

Taiwan

Italy

UK

15

DOMESTIC NETWORK

16

J I N D A L S TA I N L E S S

LT D ( J S L )

J I N D A L S TA I N L E S S H I S A R LT D

( J S H L )

GROUP STRUCTURE

I

I

I

I

17

J I N D A L S T A I N L E S S ( H I S A R ) L T D ( J S H L ) , H I S A R , H A R Y A N A .

C A P A C I T Y – 8 0 0 , 0 0 0 T P A

J I N D A L S T A I N L E S S L T D ( J S L ) , J A J P U R , O D I S H A .

C A P A C I T Y – 1 , 1 0 0 , 0 0 0 T P A

TOTAL CAPACITY – 1,900,000 TPA

I

I

18

( T o n n e s / A n n u

m )

800,000 1,100,000 -

720,000 - -

300,000 1,600,000 -

60,000 96,000 -

375,000 600,000 150,000

30,000 - -

- 100,000 -

FACILITIES & CAPACITIES

19

Jindal’s share in Indian Scrap Imports

10%

57%

90%

43%

0%

20%

40%

60%

80%

100%

MS SCRAP SS SCRAP

Jindal Stainless Others

Jindal Stainless are the Largest Single Buyer for SteelScrap in both MS and SS Scrap forms.

With YoY increasing levels of production, we hope toacquire even larger shares in Scrap Imports to India!

We share 57% Market share in Directly/Indirect

Sourced SS Scrap

Total Import Quantity to India 6 Mn MT Yearly

Total Import Quantity to India 1 Mn MT Yearly

20

T h a n k y o u f o r y o u r a t t e n t i o n !

S T A I N L E S S S T E E L S C R A P U P D A T E

Sean Davidson, CEO, Davis Index

ISRI15 Sept 2020

D I S C L A I M E RDavis Index Private Limited (Davis) makes no representations or warranties or other assurance, express or implied, about the accuracy or suitability of any information in this presentation and related materials distributed at or in connection with this presentation.

The information or opinions contained in this presentation are provided on an “as is” basis without any warranty, condition or other representation as to its accuracy, completeness, or suitability for any particular purpose and shall not confer rights or remedies upon the recipients of this presentation or any other person. Data and information contained in the presentation come from a variety of sources, some of which are third parties outside Davis’ control and some of which may not have been verified.

All analysis and opinions, data, projections, outlooks and forecasts provided may be based on assumptions that are not correct or which change, being dependent upon fundamentals and other factors and events subject to change and uncertainty; future results or values could be materially different from any forecast or estimates described in the presentation.

To the maximum extent permitted by law, Davis expressly disclaims any and all liability for any direct, indirect or consequential loss or damage, claims, costs and expenses, whether arising in negligence or otherwise, in connection with access to, use or application of these materials or suffered by any person as a result of relying on any information included in, or omission from, this presentation and related materials or otherwise in connection therewith.

The information contained in this presentation and related materials is provided for general information purposes only and should not be construed as legal, tax, accounting or investment advice or the rendering of legal, consulting, or other professional services of any kind. Users of these materials should not in any manner rely upon or construe the information or resource materials in these materials as legal, or other professional advice and should not act or fail to act based upon the information in these materials.

01 02 03H

EL

LO

DO

ME

ST

IC

EX

PO

RT

S

A quick introduction to

Davis Index

Market update on US and

Canada

Update and outlook on India,

Taiwan, China

04

SU

MM

AR

Y

Recap of key market

developments

D A V I S I N D E X01 The world’s leading provider of scrap and

raw materials market intelligence.

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No guesswork.Just pure data.

I N D E X P R O C E S S

D a t a M i n i n g

D a t a R a t i o n a l i z a t i o n

1D a t a p r o c e s s i n g

2

3

(Volume-weighted)D a t a I n d e x a t i o n

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M A R K E T C O V E R A G E

Aluminium

Primary India, USA

Scrap domestic India, USA

Scrap import China, India

Scrap export USA

Secondary alloy China, India, Japan, USA

Stainless steel

Scrap import India, Taiwan

Scrap domestic USA

Copper/brass

Primary India, USA

Scrap domestic India, USA

Scrap import China, India, Pakistan

Scrap export USA

Lead

Primary India, USA

Scrap domestic India, USA

Ingot India Zinc

Primary India, USA

Alloy India, USA

Scrap import India

Scrap domestic India, USA

Steel

Billet domestic Bangladesh, India, Pakistan

Rebar domestic Bangladesh, India, Pakistan

Ferrous scrap

Domestic Bulk imports Bulk exports Container import

Bangladesh Bangladesh Belgium BangladeshCanadaChina Ecuador Baltic Sea India

Germany Egypt Black Sea Indonesia

India Greece Germany Pakistan

Japan India Netherlands South Korea

Malaysia Indonesia UK Taiwan

Mexico Kuwait USA Vietnam

Pakistan Malaysia

South Korea Mexico Dock prices Container export

Spain Pakistan Belgium Belgium

Taiwan Peru Netherlands Japan

Thailand Saudi Arabia Russia Netherlands

Turkey South Korea UK UK

UK Taiwan USA USA

USA Turkey

Vietnam

Feedstocks

Basic Pig Iron

Black Sea

Italy

US

HBI

USA

NPI

USA

Sponge iron

India

Freight

Container Bulk

Bangladesh Brazil-US

China Europe-Turkey

India Turkey-US

Indonesia UK-Turkey

Malaysia US-Bangladesh

Pakistan US-Korea

South Korea US-Turkey

Taiwan

Thailand

Vietnam

D O M E S T I C02 A look at recent market developments in

the US and Canada

U S A : S T A I N L E S S S T E E L S C R A P

0.000

1.000

2.000

3.000

4.000

5.000

6.000

7.000

8.000

0.400

0.450

0.500

0.550

0.600

0.650

0.700

0.750

0.800

6-Ja

n-20

14-J

an-2

023

-Jan

-20

3-Fe

b-20

11-F

eb-2

019

-Feb

-20

27-F

eb-2

06-

Mar

-20

16-M

ar-2

024

-Mar

-20

1-Ap

r-20

9-Ap

r-20

17-A

pr-2

027

-Apr

-20

5-M

ay-2

013

-May

-20

21-M

ay-2

01-

Jun-

209-

Jun-

2017

-Jun

-20

29-J

un-2

08-

Jul-2

016

-Jul

-20

24-J

ul-2

04-

Aug-

2012

-Aug

-20

20-A

ug-2

028

-Aug

-20

8-Se

p-20

USD/lbUSD/

lb

316 solids del US processor 316 turnings del US processor LME Nickel cash official (secondary axis)

U S A : S T A I N L E S S S T E E L S C R A P

0.000

0.500

1.000

1.500

2.000

2.500

2-Ja

n-19

23-J

an-1

9

13-F

eb-1

9

6-M

ar-1

9

27-M

ar-1

9

17-A

pr-1

9

8-M

ay-1

9

29-M

ay-1

9

19-J

un-1

9

10-J

ul-1

9

31-J

ul-1

9

21-A

ug-1

9

11-S

ep-1

9

2-O

ct-1

9

23-O

ct-1

9

13-N

ov-1

9

4-De

c-19

25-D

ec-1

9

22-J

an-2

0

12-F

eb-2

0

4-M

ar-2

0

25-M

ar-2

0

15-A

pr-2

0

6-M

ay-2

0

27-M

ay-2

0

17-J

un-2

0

8-Ju

l-20

5-Au

g-20

26-A

ug-2

0

USD/

lb

201 solids del US processor 301 solids del US processor 309 solids del US processor

310 solids del US processor 330 solids del US processor 409/410 solids del US processor

430 solids del US processor

U S A : I N C O N E L S C R A P

1.50

2.00

2.50

3.00

3.50

4.00

4.50US

D/lb

Inconel 600 vaccum melted del US processor yard Inconel 601 vaccum melted del US processor yard

Inconel 617 vaccum melted del US processor yard Inconel 625 vaccum melted del US processor yard

Inconel 718 vaccum melted del US processor yard

U S A : C O L L E C T I O N P R I C E S

0.150

0.170

0.190

0.210

0.230

0.250

0.270

0.290

0.310

0.330

0.350

4-Ja

n-19

25-J

an-1

915

-Feb

-19

8-M

ar-1

929

-Mar

-19

22-A

pr-1

910

-May

-19

31-M

ay-1

921

-Jun

-19

12-J

ul-1

92-

Aug-

1923

-Aug

-19

13-S

ep-1

94-

Oct

-19

25-O

ct-1

915

-Nov

-19

6-De

c-19

27-D

ec-1

917

-Jan

-20

7-Fe

b-20

28-F

eb-2

020

-Mar

-20

10-A

pr-2

05-

May

-20

26-M

ay-2

016

-Jun

-20

7-Ju

l-20

28-J

ul-2

018

-Aug

-20

8-Se

p-20

USD/

lb

304 (18-8) solids del New York yard 304 (18-8) solids del Boston yard 304 (18-8) solids del Philadelphia yard

322Dallas

295New Orleans

320Houston/San Antonio

294Quad Cities

303St. Louis

280

280Philadelphia

311

Pittsburgh

285

Cleveland/Youngstown

Buffalo

318NE Arkansas

313Birmingham

275Cincinnati/Indianapolis

304Carolinas

Detroit283Chicago

U S A : # 1 B U S H E L I N G D E L C O N S U M E R

Prices are in USD/gt, 08 September 2020

270

Dallas (Consumer)

New Orleans (Dealer, Export, Pig Iron Import)

Houston/San Antonio (Consumer)

Quad Cities (Consumer)

St. Louis (Dealer)

Philadelphia (Export, Consumer)

Cleveland, Pittsburgh (Consumer)

Buffalo (Dealer)

NE Arkansas (Consumer)

Birmingham (Consumer)

Montreal (Consumer, Export)

Carolinas (Consumer)

Detroit (Consumer)

Chicago (Consumer)

Houston (Export)

Toronto-Ontario (Consumer)

Boston, Providence (Export)

New York (Export)

Tampa (Export)

Baltimore (Export)

Seattle-Portland (Export)

San Francisco-Oakland (Export)

Los Angeles (Export)

U S C O V E R A G E

Weekly assessment market Monthly assessment marketDelivered consumer buying prices, with 10 years of price history in most markets.

Bulk and containerized assessments, including freight, as well as export yard buying prices, with 10 years of price history. MAIN GRADES

ASSESSED1. #1 busheling2. Shredded 3. Shredder feed (export yards)

4. #1 HMS5. 5’ P&S6. Machine shop turnings

U S A : L O O K I N G A H E A D

• There is near-term optimism for September and October. Mills are building inventory ahead of an uncertain winter which is the key driver of nickel prices and scrap demand.

• Beyond October there is no consensus as the upcoming election and unknown extent of Covid-19 winter phases drives uncertainty.

• Analysts suggest that US stainless demand will drop by 18-25% in calendar 2020, recover by 10-15% in 2021, and return to pre-Covid levels in 2022.

• Real estate, automotive and medical equipment industries are expected to drive this recovery, with a rapid increase in the use of stainless in medical equipment negating the adverse impacts of a devasted restaurant/hospitality industry.

• Other major concerns are a growing nickel surplus, which several analysts feel will cross 100,000mt by the end of this year. The surplus was just over 30,000mt in the first half of the year.

P O L L

How long do you expect current US demand levels for stainless scrap to continue?

• 1 month

• 2 months

• 3 months

• 4 months

P O L L

Do you expect the outcome of the US presidential election to drive a stronger recovery for stainless steel in the next two years, or a weaker recovery?

• Stronger

• Weaker

E X P O R T S03

Developments in offshore markets

I n d i a : S t a i n l e s s s t e e l s c r a p

0200400600800

100012001400160018002000

USD

/mt

304 (18-8) solids cfr India port 316 solids cfr India port 430 solids cfr India port

I n d i a : Z u r i k

0

2000

4000

6000

8000

10000

12000

14000

16000

18000

700

900

1100

1300

1500

1700

7-Ja

n-20

15-J

an-2

024

-Jan

-20

4-Fe

b-20

12-F

eb-2

020

-Feb

-20

28-F

eb-2

09-

Mar

-20

17-M

ar-2

025

-Mar

-20

2-Ap

r-20

10-A

pr-2

020

-Apr

-20

28-A

pr-2

06-

May

-20

14-M

ay-2

022

-May

-20

2-Ju

n-20

10-J

un-2

019

-Jun

-20

30-J

un-2

09-

Jul-2

017

-Jul

-20

27-J

ul-2

05-

Aug-

2013

-Aug

-20

21-A

ug-2

031

-Aug

-20

9-Se

p-20

USD/mtUS

D/m

t

Zurik 85/3 cfr India port 316 solids del US processor LME Nickel cash official (secondary axis)

S h r e d d a b l e s

235.00

245.00

255.00

265.00

275.00

285.00

295.00

305.00

315.00

325.00

335.00

780

830

880

930

980

1030

1080

1130

1180

7-Ja

n-20

15-J

an-2

024

-Jan

-20

4-Fe

b-20

12-F

eb-2

020

-Feb

-20

28-F

eb-2

09-

Mar

-20

17-M

ar-2

025

-Mar

-20

2-Ap

r-20

10-A

pr-2

020

-Apr

-20

28-A

pr-2

06-

May

-20

14-M

ay-2

022

-May

-20

2-Ju

n-20

10-J

un-2

019

-Jun

-20

30-J

un-2

09-

Jul-2

017

-Jul

-20

27-J

ul-2

05-

Aug-

2013

-Aug

-20

21-A

ug-2

031

-Aug

-20

9-Se

p-20

USD/

mt

Zurik 85/3 cfr India port Zorba 99/3 cif China port Shredded cfr India port

T a i w a n

900

1100

1300

1500

1700

1900

2100US

D/m

t

304 (18-8) solids cfr Taiwan port 316 solids cfr Taiwan port 316 solids cfr India port

P O L L

Which country do you prefer exporting to?

• South Korea

• Taiwan

• India

P O L L

Why?

• More efficient to trade with

• Always honors prices, rarely re-negs, lower claims

• Easier logistics and ports management

• Always pays the highest price

S U M M A R Y04

A quick recap

S U M M A R Y

• US and Asian markets expect a strong September and October.

• After that, it’s anyone’s guess!

Sean Davidsonsean@davisindex.com

NICKEL BACK TO PRE-PANDEMIC LEVELS –WHERE DO WE GO FROM HERE?

StoneX Financial Ltd

Natalie Scott-Gray

Senior Metals Analyst

Base MetalsEMEA & Asia

2

AGENDA

• Where Are We with Nickel Prices?

• What Are the Fundamentals Telling Us?

• Nickel Prices in a Post COVID-19 World?

3

WHERE ARE WE WITH NICKEL PRICES?

4

Nickel Prices – Back to Pre-Pandemic Levels,

But Have Been Knocked Off Pre-Pandemic Trajectory

10,000

11,000

12,000

13,000

14,000

15,000

16,000

17,000

18,000

Jan-19 Jul-19 Jan-20 Jul-20

$/t

Indonesia Export Ban Announced for January

2020

COVID-19

First Reports Pandemic 2019 2020E 2021E 2022E

Nickel $/t 14,556 17,100 17,132 17,252

% Change Y/Y 11% 17% 0.2% 1%

Q1 2020 Q2 2020 Current

Nickel $/t 12,765 12,319 15,195

% Change Y/Y 2.4% 0.2%

Average Annual Nickel Price Forecasts Pre COVID-19

Quarterly Nickel Price Actual

Source for chart: Bloomberg, Design: StoneX Source for tables: Bloomberg, Design: StoneX

Source for tables: Fastmarkets, Design: StoneX

5

The Macro Economic Environment for Commodities

Has Started to Improve

Weak U.S. Dollar Plays a Positive Role

90

92

94

96

98

100

102

104

140

150

160

170

180

190

200

Jan-19 Jul-19 Jan-20 Jul-20

Ind

ex

Ind

ex

BBG Base Metal 3M USD

Global PMIs Rebound

Global GDP’s to Bounce Back

Source for chart: Bloomberg, Design: StoneX

Source for chart: Bloomberg, Design: StoneX

This chart includes predictions/forecasts. Past performance may not be a

reliable guide to future performance.

Source for chart: Bloomberg, Design: StoneX

30

40

50

60

Dec-19 Feb-20 Apr-20 Jun-20 Aug-20

Ind

ex

Global USA China Eurozone

2018 2019 2020E 2021E

China 6.7 6.1 2.0 8.0

Eurozone 1.9 1.3 (8.0) 5.6

United States 3.0 2.2 (5.0) 3.7

World 3.6 2.9 (3.9) 5.1

Worldwide PMI Readings Show Global Improvement

European PMIs Stumble

Asian PMIs are a Mixed Bag

Global PMI Readings Are Expansionary

Source for charts: Bloomberg, Design: StoneX

Please note: China’s readings is based on Caixin General Manufacturing Purchasing Mangers’ Index

7

WHERE ARE WE WITH THE FUNDAMENTALS?

8

Supply - Mine Production Hit Worse Than Originally

Anticipated

Nickel Mine Production

0

200

400

600

800

2018Q1

2018Q3

2019Q1

2019Q3

2020Q1

2020Q3

00

0 t

ROW Indonesia Philippines

-20% -15% -10% -5% 0% 5% 10% 15%

Philippines

Indonesia

Other

Canada

Russia

Australia

New Caledonia

Brazil

Nickel Mine Production Q1-Q3 (by country) Nickel Mine Production Market Share (2019)

• Mine production reached its highest level on record in 2019 at 2.6Mt.

• 7% of total production was lost over the Q1-Q3 period on a Y/Y basis reaching its lowest level since 2018.

• The higher price point for nickel has helped to reduce price-related cutbacks.

*(10%)

*(7%)*(9%)

Source for charts: CRU International Ltd, Design: StoneX

9

Supply – Refined Nickel Production Supported By

Indonesian Capacity Additions

400

450

500

550

600

650

40

60

80

100

120

140

160

180

200

220

240

2018 Q1 2019 Q1 2020 Q1

00

0 t

00

0 t

Global Indonesia China

0%

20%

40%

60%

80%

2016 2017 2018 2019 2020

Indonesia China ROW

Refined Nickel Production Refined Production % Market Share

• Refined production has risen by 3% Y/Y over the Q1-Q3 to its highest level on record.

• Key driver behind growth comes from increasing Indonesian capacity additions, which offset losses in the China and the ROW.

*2%

*4%

*4%

Source for charts: CRU International Ltd, Design: StoneX

Please note: * Percentage Y/Y Change

10

Supply – Stocks Rise to Multi-Year Highs

400

450

500

550

600

650

700

750

Feb 2019 Jun 2019 Oct 2019 Feb 2020 Jun 2020

00

0 t

• Total nickel stocks at end-June reached their highest level since August 2018.

• Exchange stocks recorded the most volatility:

Total Global Stocks LME Versus SHFE Stocks

Source for charts: CRU International Ltd, Design: StoneX

50,000

90,000

130,000

170,000

210,000

250,000

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

Jan-19 Jul-19 Jan-20 Jul-20

tt

SHFE LME

LME SHFE

YTD Change 57% (11%)

11

Demand – Stainless Steel Production Has Suffered

Across the Board

10,500

11,000

11,500

12,000

12,500

13,000

13,500

14,000

2018 Q1 2019 Q1 2020 Q1

00

0 t

Global Quarterly Stainless Steel Production Q1-Q3 Production (% Change) by Region

• Stainless Steel production has fallen by 9% Y/Y over the Q1-Q3 to its lowest level since 2017.

• A rebound in Chinese production over Q2-Q3 has not been enough to offset losses in the ROW this year.

• A build up in Chinese stocks may indicate production is running ahead of demand.

*(9%)

*(11%)

*(7%)

-30%

-25%

-20%

-15%

-10%

-5%

0%

Asia NorthAmerica

Europe Central &South

America

Africa

Source for charts: CRU International Ltd, Design: StoneX

Please note: * Percentage Y/Y Change

12

Demand – The Battery Market Will Rebound Strongly

These charts include predictions/forecasts. Past performance may not be a

reliable guide to future performance.

Source for chart: BloombergBNEF, Design: StoneX

Passenger Electric Vehicle Sales

0

500

1,000

1,500

2,000

2,500

3,000

2015 2016 2017 2018 2019 2020E 2021F

00

0 t

*59%

*52%

*77%

*9%

*(18%)

*52%

Please note: * Percentage Q/Q Change

• Nickel demand from batteries is forecast to grow by 6% Y/Y in 2020.

• A strong rebound in demand for this sector will come from COVID-19 induced government led green policy.

Engine Type Gasoline Diesel Hybrid BEV

Demand Area Stainless Steel

Stainless Steel

Lithium-ion Batteries

Lithium-ion Batteries

Demand per Vehicle (kg)

2-4 2-4 5-15 30-110

Nickel Consumption by Engine Type

Source for chart: Norncikel, StoneX

13

WHERE DO WE GO FROM HERE?

0

20

40

60

80

100

120

2020 Pre-Pandemic 2020E

00

0 t

14

Nickel Market Flips into a Surplus Market in 2020

These charts include predictions/forecasts. Past performance may

not be a reliable guide to future performance.

Source for charts: Nornickel, BloombergNEF, StoneX

Annual Market Surplus / Deficit Balance 2020 Estimates Pre-Virus Versus Current Forecast for Annual Market Surplus

70,000t nickel surplus added

-200

-150

-100

-50

0

50

100

150

2016 2017 2018 2019 2020E

00

0 t

15

Price Projections to the Upside for Nickel Have Been

Delayed

These charts include predictions/forecasts. Past performance

may not be a reliable guide to future performance.

Source for chart: Bloomberg, Design: StoneX

Market Nickel Price Quarterly Forecasts

Market Mean Nickel Price Annual Forecasts

Q1 Q2 Q3E Q4E

2019 Price (S/t) 12,468 12,298 15,565 15,420

2020 Price ($/t) 12,765 12,319 12,992 13,534

Change (%) 2% 0.2% (16.5%) (12.2%)

2019 2020E 2021E

Price (S/t) 13,970 12,903 14,253

Change (%) 6% (8%) 10%

Source for table: Fastmarkets, Design: StoneX

Source for table: Fastmarkets, Design: StoneX

10,000

11,000

12,000

13,000

14,000

15,000

16,000

17,000

18,000

Jan-19 Jul-19 Jan-20 Jul-20

$/t

Indonesia Export Ban Announced for January

2020

COVID-19

First Reports Pandemic

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Disclaimer

Senior Metals AnalystBase Metals

Natalie Scott-Gray

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