Research firm BMI has revised downward its nickel price forecast for this year to $20 000/t from $20 600/t as the market remains in a supply glut. Simultaneously, weak Mainland Chinese demand and a limited growth outlook across major markets will place a cap on prices.
Nevertheless, BMI foresees some support from the weakening of the dollar throughout this year, which will prevent prices from falling back to pre-pandemic levels.
BMI expects the nickel market to remain in surplus this year, with the balance hovering at about 337 200 t, amid a rise in supply from key producers such as Indonesia while a subdued global economic outlook presents downside risks to demand.
Beyond that, the firm expects to see the market go into deficit by 2028, as booming demand for nickel from the electric vehicle (EV) battery industry drives up overall nickel consumption. Prices will remain elevated over the coming decade, which will encourage smelters to ramp up output, although we do not anticipate that this supply growth will catch up with demand.
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