INSG forecasts nickel surplus of 135,000 t for CY'25, primary output may reach 3.64 mnt

The International Nickel Study Group (INSG) has forecasted surpluses of 167,000 tonnes (t) in 2023, 170,000 t in 2024, and 135,000 t in 2025. The global economy is expected to maintain a growth trajectory in 2024 and 2025, similar to the trend seen in 2023.

Nickel market forecast for 2024, 2025

In Indonesia, production of various nickel products is expected to increase in 2024 and 2025. This includes nickel pig iron (NPI), mixed hydroxide precipitate (MHP) from high pressure acid leaching (HPAL) plants, nickel matte derived from NPI, full plate nickel cathode, and nickel sulfate. In China, although NPI production is projected to decline, overall primary nickel output is anticipated to rise due to greater production of nickel cathode and nickel sulfate.

However, due to profitability challenges, several production facilities globally have either been mothballed, reduced output, or are considering these options for the future. The World Stainless Association reported a 5.5% y-o-y increase in stainless steel melt shop production for the first quarter of calendar year 2024 (Q1CY'24), totalling 14.6 million tonnes (mnt).

The INSG predicts continued growth in the stainless steel sector for 2024 and 2025, particularly in China and Indonesia. Although the rate of nickel consumption in batteries for electric vehicles (EVs) has not met expectations-partly due to a shift towards non-nickel batteries like lithium iron phosphate and a rising demand for plug-in hybrids-new projects for ternary precursor cathode active materials (pCAM) are expected to commence production soon, which should support increased nickel usage.

World primary nickel production was 3.360 mnt in 2023, with forecasts of 3.516 mnt in 2024 and 3.649 mnt in 2025, excluding adjustments for potential production disruptions.

Primary nickel usage worldwide was 3.193 mnt in 2023, projected to rise to 3.346 mnt in 2024 and 3.514 mnt in 2025.

As a result, the implicit market balances show surpluses of 167,000 t in 2023, 170,000 t in 2024, and 135,000 t in 2025.

LME Nickel price trend

The London Metal Exchange's (LME's) monthly average price of three-month nickel in September 2024 was $16,259/t, reflecting an 18% decrease y-o-y compared to $19,857/t in September 2023. This decline was largely attributed to rising stocks in LME warehouses, which surged by 210%, increasing from 39,516 t in September 2023 to 122,690 t in September 2024, aligning with the surplus forecast made by the INSG.