The nickel market is currently experiencing fluctuations with contrasting outlooks. Despite hopes for a recovery in nickel prices at the beginning of 2024, the market continues to face challenges due to an intensifying supply glut in various nickel sectors.

Benchmark nickel prices on the London Metal Exchange (LME) have dropped significantly this year, hovering close to three-year lows. Factors contributing to this include disruptions to Chinese giant Tsingshan's Indonesian nickel supply, cuts to Australian output, and delays in new capacity launches in Indonesia. The market has seen a surge in short positions and a covering program that has stagnated, indicating a lack of significant price movement.

Additionally, the global transition to electric vehicles (EVs) is progressing slower than anticipated, impacting nickel demand growth. Despite expectations of rising Indonesian mining output flooding the market and a potential surplus in supply momentum throughout 2024, market participants are uncertain about the direction of nickel prices in the near term.

Source: Argus Media