Nickel price forecasts become more negative

The fundamental background for nickel is deteriorating. Despite this, the metal's prices remain stable and have been trading at the same level for more than a month. The interest in green energy is increasing demand for the metal. At the same time, the construction of nickel mining plants is growing, which may eventually lead to the overstock market. This hypothesis is confirmed by Indonesia, which is rapidly increasing its production of raw materials.

The International Nickel Study Group (INSG) is projecting a supply-demand surplus of 239,000 tons. This is the highest figure in a decade, significantly exceeding last year's surplus of 105,000 tons.

According to the INSG data, Indonesia’s nickel production rose by 48% to 1.58 million tons last year and another 44% in the first two months of this year.

Other major producers of the metal are also not lagging behind. Nickel Asia, the largest nickel ore producer in the Philippines, plans to commission two more mines within three years.

China’s demand for metals remains worse than expected.

BTR New Material Group, Chinese supplier of battery materials, forecasts a fall in nickel prices by about two-thirds to $8,000 per ton. Battery costs are expected to decline sharply, benefiting electric car manufacturers. Yang Shunyi said about visiting nickel producers in Indonesia. Now refineries with a planned production of 4 million tons of nickel per year are building in the country. For this reason, supply will exceed demand, and prices for the metal will inevitably fall.

According to the technical analysis, the nickel price is consolidating at the same level. An attempt to form an uptrend is now observed. The price of the metal may continue to decline, missing the reversal, amid weak fundamentals.

The downside target will be the local low of $22,510. A Stop-loss will be placed at breaking through the resistance level of $24,390.

Nickel prices are likely to decline:

Take profit – 22,510

Stop-loss – 24,390