Nickel Price Forecast 2024: Fitch Solutions Maintains $18,000/T Forecast

Nickel Price Forecast 2024: Fitch Solutions Maintains $18,000/T Forecast
Nickel Price Forecast 2024: Fitch Solutions Maintains $18,000/T Forecast

The Fitch Solutions analyst has maintained its 2024 nickel price forecast at $18,000 per tonne, due to a supply glut that continues to weigh on prices from 2022 levels. Despite a brief recovery earlier this year, prices have since fallen again, reflecting a decline in market confidence.

Price dynamics in 2023

Nickel prices fell significantly last year, with the average annual price in 2023 at $21,688 per tonne, down 15.3% from $25,618 per tonne in 2022. Fitch attributes this decline to an oversaturated market and weak demand.

Supply and Demand Factors

Market dynamics in 2024 are expected to limit price growth, with production increasing in China and Indonesia. These countries, leaders in refined nickel production, have recorded significant growth in production in the first quarter of 2024.

In Indonesia, refined nickel production increased by 24.7% to 383,000 tonnes in the first quarter of 2024, compared with 307,000 tonnes in the same period in 2023. China, the world’s second-largest producer of refined nickel, recorded 2.3% year-on-year growth in the same period to 220,000 tonnes.

Risks and Projections

Despite current pressures on nickel prices, Fitch expects certain upside risks, such as potential supply disruptions and a possible weakening of the US dollar, which could prevent a significant price decline over the course of the year.

Fitch projects a surplus of 253,000 tonnes in the global nickel market in 2024, up from the 209,000 tonne surplus estimated for 2023. This surplus is mainly due to increased production of nickel pig iron and intermediate products in Indonesia, driven by increased investment following the nickel ore export ban in 2020.

LME Measures and Long-Term Outlook

The approval of new nickel brands on the London Metal Exchange (LME) was a strategic response to address low inventories and reduce price volatility. The LME also resumed Asian trading hours and set daily trading limits to stabilise the market.

Beyond 2024, Fitch sees nickel prices continuing to rise through 2028, reaching $21,500 per tonne, driven by rising nickel demand for electric vehicle battery production. Fitch forecasts prices to reach $26,000 per tonne in 2033 as the market surplus narrows significantly to 24,500 tonnes.



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