DIGIVESTASI - Nickel prices are expected to remain under pressure next year. Several factors will continue to put pressure on base metal prices next year. 

Thomas Radityo, Analyst at Ciptadana Sekuritas Asia, estimates that the nickel market will remain in surplus at least until 2025. This situation is mainly due to the abundance of nickel products from Indonesia and the rapid growth of class 1 nickel smelters in China.

This has put nickel prices on the London Metal Exchange (LME) under pressure. Thomas noted that LME nickel prices fell 45.8% year-to-date (YTD). Meanwhile, Thomas estimates that the nickel iron price (NPI) has reached a low of $10,920/ton in December 2023.

However, Thomas believes that supply will decrease in the short to medium term due to lower nickel prices. Taking these factors into account, Thomas adjusted the nickel reference price for 2024 and 2025 to $18,000/ton and $17,000/ton, respectively. Meanwhile, the nickel reference price at the end of 2023 is still at $23,000/ton. 

MNC Sekuritas analyst Alif Ihsanario also believes that nickel's fortunes are unlikely to improve next year. The weak performance of the Chinese economy and the continued decline in the Chinese real estate sector still haunt the prospects of the nickel industry next year. Indeed, China absorbs about 60% of global metal supply. Thomas believes the electric vehicle segment continues to drive nickel demand.

Demand for electric vehicles in China is still high, and electric vehicle sales in the US and EU are also rising sharply. 
Thomas expects electric vehicle battery prices to decline from 2024. Thus, the potential for reducing the price gap between diesel and electric vehicles is growing. This situation is expected to increase demand for electric vehicles, which in turn increases demand for nickel. 

"So it is estimated that electric vehicle batteries will account for 20% of the total use of processed nickel in 2025," Thomas wrote in his research note, Thursday (15/12).