Bearish factors weigh on price and demand

Nickel prices have performed worst among the major base metals as market imbalances persist. Recyclers continue to grapple with slowing demand, macroeconomic concerns, geopolitical risks, and bearish investor sentiment.

Compared to other non-ferrous metals and commodities in general, nickel prices have significantly underperformed in 2023. According to Marex Research, prices at the London Metal Exchange were down nearly 40% for the year-to-date through to October.

In early November, LME nickel traded below US$ 18 000 per tonne having been above US$ 30 000 per tonne early in the year. As prices have slumped, nickel stocks in LME warehouses have expanded to more than 44 000 tonnes, up from 37 000 tonnes at the end of August.

Deteriorating nickel fundamentals have weighed on market sentiment and pricing. According to the latest projections from the International Nickel Study Group (INSG) in October, global nickel supply is expected to exceed demand by 223 000 tonnes in 2023 and 239 000 tonnes in 2024. Rising Indonesian nickel output in all forms continues to be the main driver of this surplus.

According to INSG, ‘Indonesian nickel pig iron (NPI) production is forecast to continue to rise, new high pressure acid leaching plants to produce mixed hydroxide precipitate are continuing to ramp up output, and the conversion of NPI to nickel matte is growing’.

INSG estimates show Indonesian mined nickel output during the first seven months of 2023 surged 31% higher year-on-year, following a 48% annual increase in 2022.

US picture

For US recyclers of stainless steel, improved demand from overseas markets has helped to offset some of the weakness in domestic demand. According to the latest trade data from the US Commerce Department, US exports of stainless steel scrap during Jan-Sep 2023 increased nearly 27% to more than 400 000 tonnes.

India has become the largest importer of recycled stainless steel from the United States, with year-to-date 2023 shipments up 33.7% to 141 634 tonnes through to September.

Read the full nickel & stainless report in our upcoming issue >>