Asian nickel prices are likely to see limited upside in the third quarter on weak market fundamentals due to thin downstream demand for nickel-manganese-cobalt batteries and stainless steel amid rising primary nickel output.
"We expect weak global primary nickel market fundamentals -- emphasized by our forecasts for total primary nickel stocks [in terms of weeks of consumption] to reach a four-year high in 2024," said Jason Sappor, metals and mining research senior analyst at S&P Global Commodity Insights.
Despite recent supply disruptions following delayed Indonesian nickel mining license approvals and mine shutdowns amid social unrests in New Caledonia, the world's third largest nickel-producing country, primary nickel is expected to remain in an oversupply of 98,000 mt in 2024, Commodity Insights data showed.
To deal with supply disruptions, Indonesia and China -- forecast to make up 72% or 2.63 million mt of global primary nickel production -- were seen increasing Philippines nickel ore imports in the second quarter. Indonesia saw a 24% month-on-month jump in imports to 280,000 mt in April, according to BPS-Statistic Indonesia, and China imported 4.61 million mt, rising 28% month on month in May, China customs data showed.
