The price of nickel on the London Metal Exchange (LME) may rise by more than 20% to $20,000/ton by the end of 2024, according to a June forecast published by Commerzbank. On July 17, three-month nickel futures on the LME were trading at about $16,550/ton.
The bank does not give an explanation for its forecast. Among the reasons that can affect the price of nickel are delays in issuing permits for the development of new deposits in Indonesia (world’s top miner of the metal) and expectations of US Federal Reserve interest rate cuts, analysts said.
In a review dated May 30, Norilsk Nickel gave a forecast of a surplus in the nickel market this year of 100,000 tons. The company lowered its previous estimate by 90,000 tons, explaining this correction by the slowdown in the development of new Indonesian deposits and good demand outlook for the world nickel market. This metal is necessary for the manufacture of stainless steel, with 60% of such alloys requiring it.
Russia’s strategy for the development of metallurgy sector until 2030, 70% - 80% of stainless steel consumed in the country is imported.
The Spetsstal Association assumes that this year, the import of stainless steel can grow to 487-492 thousand tons, surpassing the record set in 2019. In five years, Russia may need 15% more stainless steel than in 2021 at about 616,000 tons, the Ministry of Industry and Trade predicts.
Alex Shishlo, Editor in Chief of the European Bureau, Rough&Polished
