Nickel has been a beleaguered commodity in recent times, but there are some positive signs entering the nickel market.
Nickel prices rebounded strongly in the June quarter of 2024, with London Metal Exchange (LME) nickel averaging $US18,500 per tonne (t) across the three months. This is about 20 per cent higher than February lows.
The June 2024 ‘Resources and Energy Quarterly’ (REQ) from the Australian Government expects LME nickel prices to average $US17,800/t this year, before rising to $US18,400/t in 2025 and $US18,800/t in 2026.
This is largely because of rising nickel demand rather than depreciating supply.
“Global nickel demand grew 8.8 per cent year-on-year in the March quarter 2024, maintaining a consistent recovery from 2020 COVID-lows,” the report stated.
“The increase in global demand in the last 12 months has primarily been led by Indonesia and China, with other major markets such as Europe and the US stable in year-on-year terms.
“World stainless steel production – two-thirds of global nickel demand in 2023 – continues to be a primary driver of growth. This included the world’s largest stainless-steel producer, China, with stainless steel output up 1.8 per cent year-on-year in the March quarter.”
While new sans-nickel battery chemistries are providing headwinds to the commodity, such as lithium iron phosphate and sodium-ion batteries, there are positive developments for the base metal in the US.
“In the US, considerable new investment in domestic manufacturing capacity is expected to result in growing demand for nickel from the North American market over the outlook period,” the June REQ stated.
“The surge in investment comes as a consequence of policies such as the Infrastructure Investment and Jobs Act and Inflation Reduction Act (IRA).
“A key emerging industry is the US’ domestic electric vehicle sector, with more than $US100 billion of reported investment in the US battery supply chain following the introduction of the IRA.
“Similarly, investments in nickel-intensive clean energy applications such as hydrogen, nuclear and wind power generation have totalled more than $US6.5 billion post-IRA.”
The June REQ expects global nickel demand to grow by 3.6 per cent annually in the coming years.
“Clean energy technologies, including EVs and low-emission power generation technologies – such as wind, hydro and geothermal – are expected to be the primary driver of growth,” the report stated.
“Demand from traditional uses of nickel (such as stainless steel in consumer goods and construction) is expected to be steady.”
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