Nickel prices are projected to be around US$18,000/t in 2024, primarily due to ongoing excess supply from China and Indonesia, according to BMI, a subsidiary of Fitch Solutions. However, by 2028, the company expects prices to increase to US$21,500/t, driven by rising demand for electric vehicle EV batteries.

In 2023, nickel prices saw a significant drop, with the average annual price decreasing by 15.3% to US$21,688/t, driven by market oversupply and weak demand. Despite a brief price surge earlier in 2023, where prices hit a high of US$21,615/t on May 20, they fell to US$17,291/t by June 28. This closing price represented a 4.3% increase year-to-date but also a 15.5% decline month-on-month due to decreasing investor confidence. Fitch indicates that this negative shift in market sentiment could continue to pressure nickel prices, with increased production in China and Indonesia limiting potential price growth. Nevertheless, Fitch identifies potential upside risks, such as possible supply disruptions and a weakening US dollar later in the year, which could prevent a sharp decline from current price levels.

Fitch also expects a significant production increase in 2024, forecasting a global nickel market surplus of 253,000t, up from an estimated 209,000t in 2023. This surplus is largely driven by Indonesia’s increased production of nickel pig iron and intermediate nickel products.

In 1Q24, Indonesia's refined nickel production increased by 24.7% to 383,000t, up from 307,000t in the same period in 2023. Meanwhile, China saw a 2.3% year-on-year production increase in the same period, reaching 220,000t, up from 215,000t in 2023.

In the medium term, Fitch expects nickel prices to reach US$21,500/t by 2028. This rise will be fueled by growing demand for nickel, especially for EVs batteries. However, the ongoing increase in output from Indonesia will partially offset the price increases. Fitch projects nickel prices to reach US$26,000/t by 2033, as the market surplus significantly narrows to 24,500t.