Nickel prices averaged USD 24,016 per Metric Ton in February, which was 7.8% higher than January’s price of USD 22,285 per metric ton. February’s increase was largely attributed to lower stocks, amid heightened geopolitical tensions and demand for electric vehicles. The average price for nickel was up 29.2% from the same month last year. Moreover, on 28 February, nickel traded at USD 24,661 per metric ton, which was up 8.0% from the same day of the previous month.
Nickel prices surged in recent weeks, hitting another multi- year high at the end of February. As Russia, the third largest producer of the metal, invaded Ukraine, a backlash of sanctions and embargoes, such as Maersk’s refusal to ship to Russian ports and the UK’s decision to refuse Russian ships in its ports, likely fueled fears of disruptions to deliveries of the metal ahead. On the demand side, EV car sales remained healthy in recent weeks while stocks in the London Metal Exchange warehouses are reportedly down to nearly one- third of April 2021’s levels last year, seemingly adding further upside pressures to nickel price rally.
Nearly half of our panelists revised their forecasts upwards this month, while others took a wait-and-see approach amid fast-changing military conflict in Ukraine. Overall, prices are expected to cool from their current levels ahead, albeit remaining elevated nonetheless. Rising output for both nickel pig iron and battery-grade nickel will exert downward pressure on prices. That said, strong demand from the stainless steel industry—expected to be the main driver of nickel use in the near term—and rising appetite for EV batteries will sustain prices. Uncertainty stemming from the war in Ukraine is a key outlook risk. FocusEconomics panelists see nickel prices averaging USD 20,513 per metric ton in Q4 2022 and USD 19,014 per metric ton in Q4 2023.
This month, 7 panelists on our Consensus Forecast panel raised their Q4 2022 projections. Meanwhile, no panelists cut their forecasts and 8 left their forecasts unchanged from the previous month.
