Russian multi-metals producer Norilsk Nickel (Nornickel) expects the global nickel surplus to hit 150,000t in 2024-25, up by around 50pc from its earlier forecast of 100,000t.
It largely attributed this to a surge in high-grade nickel production capacities in China. Nickel inventories on exchange platforms have more than doubled on the year to over 100,000t in 2024, according to Nornickel. This, coupled with off-warrant inventories and under-reported stocks, could boost the class 1 nickel surplus to 150,000t in 2024-2025.
The surplus is concentrated in the high-grade nickel sector, mainly because of a surge in new cathode capacities. The London Metal Exchange (LME) approved four new nickel cathode brands from China and Indonesia this year, with a fifth brand, JIEN, which recently just applied to be listed on the platform. If approved, the additional combined production capacity from 2024 could reach 130,000 t/yr.
About 40pc of the global nickel producers are contending with losses, but prices could rise given an influx of lower-cost Indonesian nickel products that is pushing operations in other regions out of the market, according to Nornickel. The nickel market could also be more balanced owing to high nickel consumption from the stainless steel sector and potential supply disruptions from Indonesia, given uncertainty in RKAB work plan approvals and deteriorating nickel pig iron grades.
