Fitch's Business Monitor International (BMI) Research report maintains the forecast for the average nickel price in 2024 at US$18,000 per ton, mainly due to market oversupply and increased output from Indonesia and China.

Despite this, potential supply disruptions and a weaker U.S. dollar, following anticipated interest rate cuts by the Federal Reserve starting in September, are expected to stabilize nickel prices.

The report also predicts that nickel prices will gradually rebound after 2024, driven by increased demand for battery metals and a narrowing market surplus. From 2025 to 2028, average nickel prices are estimated to be between US$18,500 and US$21,500 per ton.

The global nickel market is expected to have a surplus of 253,000 tons in 2024, up from 209,000 tons in 2023, primarily due to increased production of Indonesian nickel pig iron and intermediate nickel products. Indonesia's refined nickel production rose by 24.7% year-on-year to 383,000 tons in the first quarter, while China's production increased by 2.3% to 220,000 tons.

Challenges in the nickel market include delays in Indonesian mining approvals, reducing ore inventories at domestic smelters, and rising political tensions in New Caledonia, which may lead to tighter global supplies. Indonesia has approved an annual production quota of about 240 million tons of nickel ore for the next three years, which falls short of the 260 million tons expected by the Indonesian Nickel Miners Association, potentially leading to raw material shortages for smelters.