BMI Country Risk and Industry Research is revising its nickel price forecast for 2024 from $18,000/tonne to $17,300/t, as the market grapples with a substantial surplus, Kallanish notes. 

The research house anticipates that a significant increase in 2024 global refined nickel production, driven by a rise in output in Indonesia and mainland China, will be the core driver of price declines.

“Despite the current pressures on nickel prices, we expect upside risks – including but not limited to potential supply disruptions and a weakening of the US dollar later in the year – to place a floor under prices throughout the year, preventing a significant decline from current levels,” it says in a note.

Beyond 2024, nickel prices are set to continue to face downward pressure, seeing more moderate growth than previously anticipated due to the surge in Indonesian nickel production.

BMI now expects nickel prices to average $19,000/t in 2028, down from $21,500/t.  This downgrade is primarily driven by the continued ramp-up of output in Indonesia and technical advances in converting lower-grade Class 2 nickel ore that is abundant in Indonesia into higher-grade Class 1 nickel that can be used in the battery industry.

In the longer term, BMI holds a more optimistic nickel price outlook as the market surplus narrows on the back of surging demand for nickel along with the growth in the stainless steel sector and a rise in the production of EV batteries. It forecasts prices to reach $26,000/t in 2033 as the market tips into deficit.