Column: Nickel faces huge supply glut as Indonesian output booms – by Andy Home (Reuters – April 27, 2023)

LONDON, April 27 (Reuters) – The nickel market is facing a massive supply glut this year as surging Indonesian production continues to outpace global demand. The International Nickel Study Group (INSG) is forecasting a supply-demand surplus of 239,000 tonnes, the largest in at least a decade and a significant increase from last year’s excess of 105,000 tonnes.

It also represents a lift from the Group’s last assessment in October, when it expected a surplus of 171,000 tonnes for this year. Demand expectations have been tempered, although nickel usage is on track to register healthy 6.1% growth in 2023. It still won’t be enough to absorb the wave of new production coming out of Indonesia.

The supply surge, though, is not coming in the form of the Class I refined metal traded on both the London Metal Exchange (LME) and the Shanghai Futures Exchange. That may complicate the pricing impact.

The INSG estimates global nickel usage rose by 6.3% last year and forecasts it will almost match that rate this year. It’s a resilient performance given that stainless steel is still the largest component of nickel usage and output of the alloy fell by 5.2% last year, according to the World Stainless Association.

For the rest of this article: