Credit Suisse expects nickel prices to subside over the forecast period as it forecasts a growing nickel surplus driven by Indonesian output.

Nickel prices are projected to fall to 22,198/tonne this year from 26,227/t in 2022, Kallanish learns from a Credit Suisse report.  

“Indonesia creates surpluses so high under our base case that we now forecast price-driven supply cuts in 2025 to restore profit to the price,” it says.

Credit Suisse expects nickel demand growth of 5% in 2023, with stainless demand growing at 2.4% and non-stainless demand at 9.5%, led by battery cathodes.

However, it says supply, led by Indonesia, should grow at 9.6%, outpacing demand and driving the market into a heavy surplus of 400,000 t. From 2024, it expects nickel demand to accelerate further led by cathodes, but still fail to keep pace with Indonesian output. This will lead the prices to fall to $17,640/t.

With repeated heavy surpluses, it expects the nickel price to retreat to $16,540/t in 2025 and force supply rationalisation of about 400,000 t. The reduction in the balances should then enable price recovery from 2026, says the research house.