Global nickel market surplus to widen in 2024 -INSG

Adds estimate of market surplus in 2024, comment about production in Indonesia, China

The surplus in the global nickel market is expected to widen to 239,000 metric tons in 2024 from 223,000 tons this year, the International Nickel Study Group (INSG) said on Tuesday, signalling further pressure on the metal.

Prices for nickel CMNI3 on the London Metal Exchange are down 38% so far this year. High-grade “Class 1” nickel can be delivered against the LME contract, while production of lower-grade “Class 2” is soaring in Indonesia.

“Historically, market surpluses have been linked to LME deliverable/class I nickel but in 2023 and 2024 the surplus will be mainly related to class II and nickel chemicals,” the INSG said.

Global demand for nickel is expected to increase to 3.47 million tons in 2024 from 3.20 million in 2023 due to recovery of the stainless steel sector and increased usage of nickel in electric vehicle batteries, the Lisbon-based group said.

It expects global output to increase to 3.71 million tons in 2024 from 3.42 million in 2023 as Indonesia's nickel pig iron (NPI) production continue to rise.

Indonesia's new high-pressure acid leaching (HPAL) plants that produce mixed hydroxide precipitate (MHP) are also continuing to ramp up output, and the conversion of NPI to nickel matte is growing, the INSG said.

NPI production in China is likely to decrease in 2024 but nickel cathode and nickel sulphate production is anticipated to increase, it added.