Fitch Solutions revises down 2023 nickel price forecast
Fitch Solutions is revising down its nickel price forecast for 2023 to $26,500/tonne from $30,000/t as global production volumes rise while the market remains in surplus, Kallanish notes.
The research house maintains the view that global nickel production will increase significantly in 2023 on the back of a ramp-up in Indonesia’s and China's output.
It forecasts a surplus in the market in 2023 of 283,100 t, expanding from the surplus of 112,800 t seen in 2022, as production rises alongside a comparatively weaker demand outlook.
According to Fitch Solutions, the main driver leading to oversupply in the global market is the ramp-up in Indonesia’s output due to greater investment in the country’s downstream nickel industry following the government’s ban on nickel ore exports in January 2020.
Despite a downwards revision to its forecasts, it notes that nickel prices in 2023 will remain elevated compared to historic levels due to growth in stainless steel and electrical vehicle (EV) production in 2023 – two key refined nickel consuming industries.
It forecasts Chinese refined nickel consumption to rise by 4% on-year in 2023 to 1.2 million t.
It notes, however, that the global economic slowdown alongside elevated inflationary pressures will present downside risks to global refined nickel demand, and thus prices, in the short term.
In 2024, it expects nickel prices to average $27,000/t, above the 2023 average, as demand outpaces supply while inflationary pressures ease and global nickel demand rebounds.
Beyond that, it expects nickel prices to increase at a faster pace in 2028, rising to $29,000/t as the market goes into deficit on the back of surging demand for nickel along with the rise in the production of EV batteries.
It forecasts nickel prices to reach $32,000/t in 2032 as demand growth outpaces that of supply with the market deficit climbing to 250,600t, putting upward pressure on prices.
More free articles from our archive
More Global Prices
Take a Free trial
Get daily steel news redirect to your inbox each day,
along with prices.