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Nickel Price 2024 Year-End Review
Read on to learn what other key factors moved the nickel sector in 2024.
Nickel price in Q4
Nickel reached its 2024 peak of US$21,615 per metric ton on May 20, but was back below the US$16,000 mark by the end of July. Following some volatility in August and September, it reached US$18,221 on October 2.
However, higher prices were not to last, and nickel spent much of Q4 in a downward trend.
By the end of October, nickel had fallen to US$15,732 before climbing back to US$16,607 on November 7.
Since then, the nickel market's downtrend has largely continued. On December 19, the metal slumped to its 2024 low of US$15,090, ultimately ending the year at US$15,300 on December 31.
Nickel price, Q4 2024.
Chart via Trading Economics.
As mentioned, nickel’s weak price performance is largely due to high output from Indonesia and low demand, particularly from Asian markets, as China’s recovery has failed to gain traction.
Against that backdrop, Indonesia said on December 19 that it was considering cutting mining quotas to boost prices. The move would reduce the amount of nickel ore allowed to be mined almost in half, to 150 million metric tons in 2025.
Additionally, Indonesia is looking to tighten environmental regulation compliance for miners in the new year, which could increase volatility for metals including nickel. The move comes not long after the country signed several new agreements in November with Chinese companies that would see billions invested in Indonesian nickel operations.
Indonesia had previously worked to distance itself from partnerships with China as it sought to improve relations with the US and be included under the country's US Inflation Reduction Act (IRA).
The new agreements emerged shortly after Donald Trump won the US presidential election on November 7. Trump’s return to the Oval Office is unlikely to bode well for Indonesian officials seeking to secure a trade deal with the US. However, a loosening of rules in the IRA might create new inroads for Indonesian nickel producers.
How did nickel perform for the rest of the year?
Nickel price in Q1
The story since the start of the year has been high output from Indonesian operations.
Low prices saw some nickel producers, including major miner First Quantum Minerals (TSX:FM,OTC Pink:FQVLF) and Australia’s Wyloo Metals, cut production. However, New Caledonia was most affected. The country is highly dependent on its nickel sector, with industry giants like Glencore (LSE:GLEN,OTC Pink:GLCNF), Eramet (EPA:ERA) and raw materials trader Trafigura owning significant stakes in nickel producers in the country.
Ultimately, cuts there led to a 200 million euro bailout package from the French government, which exacerbated tensions over New Caledonia's independence from France. Opponents of the agreement argued that it risks the territory's sovereignty, and that mining companies aren’t contributing enough to bail out the mines, which employ thousands.
Nickel price in Q2
The second quarter was defined by a surge in nickel prices.
Positive momentum began to work its way into the market at the end of Q1, as Indonesia experienced delays in approving mining output quotas and speculation grew that Russian nickel could be sanctioned by the US and UK.
On April 12, news broke that Washington and London had banned US and UK metal exchanges from admitting new aluminum, copper and nickel from Russia. Taking immediate effect, the prohibitions also halted the import of those metals, causing prices to soar to a year-to-date high of US$21,615 on May 20.
At the time, Joe Mazumdar, editor of Exploration Insights, suggested this move would have little impact on the sector.
“That nickel is still going to make it into the market, it’s just going to go to a different exchange, probably Shanghai … So I could still see that nickel moving and getting consumed in the global market — it’s just not coming to the west,” he explained to the Investing News Network in an interview.
Ultimately, by the end of the quarter, the price was trending toward US$17,000.
Nickel price in Q3
Nickel saw a strong end to the third quarter, with prices rising above the US$18,000 mark.
Nickel found support in September as the Chinese government introduced a raft of stimulus measures intended to boost economic growth in the country. Among the measures were a 0.5 percent interest rate cut on existing mortgages, and a reduction in the downpayment required to purchase a home to 15 percent from 25 percent.
The announcement came alongside cuts at Chinese smelters as they were forced to deal with a shortage in feeder supply due to more delays to Indonesia’s permitting and quota system.
Investor takeaway
The nickel market is expected to remain oversupplied for some time.
With China’s economy on a slow path to recovery, demand is projected to remain weak. Meanwhile, supply will likely hinge on whether Indonesia chooses to make significant cuts to its output.
While demand for nickel in electric vehicle batteries is expected to be up 27 percent year-on-year in 2024, producers have also been pursuing alternatives that don’t require as much nickel. Additionally, more consumers are looking to plug-in hybrid vehicles with smaller batteries that require less nickel.
Even with the increased demand from the battery sector, nickel is primarily used in stainless steel products, which are still dominated by the Chinese manufacturing and real estate sectors.
Perhaps the most significant factors to consider are political. A new administration in the US and a shift in its approach to sourcing critical metals like nickel could alter the landscape for nickel producers in 2025.
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Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
Editorial Disclosure: The Investing News Network does not guarantee the accuracy or thoroughness of the information reported in the interviews it conducts. The opinions expressed in these interviews do not reflect the opinions of the Investing News Network and do not constitute investment advice. All readers are encouraged to perform their own due diligence.
Accelerated Non-Renounceable Entitlement Offer Results
Under the Entitlement Offer, eligible shareholders were invited to subscribe for one (1) New Share for every four (4) existing Shares held at an offer price of $0.03 per share.
The Company has now closed the retail component of the Entitlement Offer with applications totalling 2,767,788 shares including additional acceptances to be issued at $0.03 on top of the 18,650,023 shares issued under the institutional component of the Entitlement Offer on 15 November 2024. In accordance with the timetable, the New Shares will be issued on or before 4 December 2024.
The retail component of the Entitlement Offer is partially underwritten by Nanjia Capital Limited “(Nanjia”) for the amount of approximately $1.09m. Accordingly, Nanjia will now subscribe for 36,349,900 New Shares in accordance with the underwriting arrangements summarised in section 7.4(b) of the Prospectus and the Company expects to finalise this process within the next week.
Shortfall Share Placement
A total of 74,946,591 New Shares were not taken up under the Entitlement Offer by eligible securityholders or issued to Nanjia as underwriter (“Shortfall Shares’”) The directors will work with the lead manager to the Entitlement Offer and the major shareholders to place the shortfall within three (3) months of the closing date, subject to requirements of the ASX Listing Rules and Corporations Act 20021 (Cth) continuing to be met. Please refer to the Prospectus dated 4 November 2024 for further details on the issue of the shortfall.
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