LONDON, June 7 (Reuters) – Nickel has been the under-performer of the London Metal Exchange (LME) base metals pack this year. LME three-month nickel sank to a nine-month low of $20,310 per tonne last week and at a current $21,500 is now down by 31% since the start of the year.
Nickel is pricing in a looming supply glut as Indonesia builds out ever more production capacity in its race to be an electric vehicle battery metals giant. The country’s mined output grew by 48% last year and by another 41% in the first three months of this year, according to The International Nickel Study Group.
Indeed, such is the scale of the Indonesian nickel boom that the market could be in large surplus until at least 2027, Macquarie Bank analyst Jim Lennon told an industry conference in Jakarta last week. You wouldn’t know it from LME stocks, which are at their lowest since 2007 with metal still departing daily.
The supply surge hasn’t yet crossed nickel’s class divide and low visible inventory is still cushioning the price fall.