Surging exchange stocks pile the pressure on nickel – by Andy Home (Reuters – January 17, 2024)

LONDON, Jan 17 (Reuters) – Nickel was the worst performer among the London Metal Exchange’s (LME) base metals last year by some margin as the market priced in a wave of new Indonesian supply.

Indonesia’s mined production rose by 29.2% year on year in the first 10 months of 2023, according to the International Nickel Study Group. Nickel demand is rising fast thanks to its use in electric vehicle batteries but nowhere near the pace of supply growth.

Until recently the growing supply surplus was confined to intermediate products such as ferronickel and matte rather than the high-purity refined metal that trades on the LME and the Shanghai Futures Exchange (ShFE).

That is changing as stocks rise on both exchanges, narrowing the pricing gap between refined metal and other forms of nickel. LME three-month nickel , currently trading at $16,050 per metric ton, is now eating into the cost curve and hard-pressed producers could face more margin pain.

For the rest of this article: