Goldman Sachs Raises Three- and Six-month Nickel Price Forecasts

Platts reported that Goldman Sachs Group Inc. (NYSE:GS) has upped its three- and six-month nickel price forecasts due to the Indonesian export ban.

Its three-month forecast now sits at $18,000 per metric ton (MT), up from $14,500, while its six-month forecast comes to $20,000 per MT, up from $15,000. Goldman has left its 12-month forecast at $16,000 per MT.

As quoted in the market news:

In terms of potential upside risk to this forecast, the bank said any nickel export sanctions on Russia could push prices higher.

Downside risk could come from Indonesian mining employee protests, lobbying, and economic concerns relating to lost export and tax revenues that could result in a government policy moderation.

However, Goldman Sachs sees this downside risk as a ‘low probability outcome’ before late 2014.

‘By mid-2015, we expect nickel prices to normalize on the back of a forecast aggressive build out of blast furnace processing capacity in Indonesia, which has very low marginal cash costs of $11,500/mt (delivered China) based on our estimates,’ the bank said.

Click here to read the full Platts report.