Macquarie Foresees Nickel Prices at $18K/Tonne by End-2019

SEATTLE (Scrap Monster): The supply shortage for nickel in global market is likely to persist in the near-to-medium term, which in turn may lend strong support to nickel prices through 2019. The above view was expressed by Macquarie Capital during the 6^th Asian Nickel Conference organized by MetalBulletin being held in Jakarta, Indonesia.

Macquarie foresees slower production increases in Indonesia- the leading nickel supplier country. This, coupled with rising demand for stainless steel, is likely to extend supply shortfall in global nickel markets. Consequently, nickel is likely to report price gains through 2019. As per estimates provided by Macquarie, nickel prices are expected to touch $16,000 per tonne by the end of this year and rise further to hit $18,000 per tonne by end-2019.

Along with reduced output growth from Indonesia, supply disruptions in Eramet’s New Caledonia mines and Chinese pollution control reforms are likely to lend support to nickel price recovery in 2018. The depleting inventories could result in higher prices. Nickel prices will also be supported by rise in stainless steel demand growth, primarily triggered by Chinese policy actions aimed at stimulating growth. Incidentally, global stainless steel demand has surged higher by 9% during the first six months of 2018.

Also, Norilsk Nickel predicts extension of global nickel market deficit for another three years. Wood Mackenszie too forecasts growth in nickel prices, with markets facing deficit in 2018 as well as 2019.