Posted on 13 Feb 2023
ANZ Research has maintained its year-end nickel target at $25,000/tonne as it foresees nickel prices trending lower in 2023 on oversupply, Kallanish notes.
The research house says in a note that it expects the global nickel market to move into a small surplus of 55,000 t in 2023. However, it sees some upside risk to the surplus considering the incentive for additional supply to enter the market remains high.
“We have kept our demand forecast unchanged despite signs of slowing growth in electric vehicle (EV) sales,” it says.
Even if supply tightness continues, it sees nickel prices likely capped near $30,000/t.
Its base case scenario is that prices will trend lower over the course of 2023 as fundamentals deteriorate.
According to ANZ, a tight nickel market and subsequent high prices have induced a supply response, which could lead to downward pressure on prices if the EV market fails to deliver on its lofty goals.
“Strong demand from both the stainless steel and EV sectors has supported prices over the past two years. With the EV revolution gaining pace, tightness in nickel used specifically in batteries has led to an explosion in nickel projects,” it says.
According to ANZ, Indonesia is gearing up to be an integral part of the battery supply chain.
Ultimately, it says the use of laterite ore to feed the battery sector could bring about a structural change in the nickel market from this year.
“This tightness in the battery nickel market doesn’t present the broader market fundamentals. Exchange inventories are not reflective of a growing surplus of nickel feed for stainless steel,” it says.
Source:Kallanish
