Nickel Price Update: Q3 2024 in Review

After bottoming out, the price quickly climbed to US$16,604 on July 31.

Nickel remained largely rangebound between US$16,150 and US$16,500 for the start of August, but saw upward momentum in the middle of the month that pushed the price to US$17,136 on August 27.

The beginning of September saw the price collapse again, reaching a quarterly low of US$15,741 on September 10 and just shy of the year-to-date low of US$15,668 set on February 9. However, pricing pressure wasn’t to last and the price of nickel saw rapid gains through to the end of September reaching a quarterly high of US$17,698 on October 1.

China demand lagging

Even though demand for batteries continues to grow, it hasn’t been able to outpace the oversupply situation, this has largely been due to a weak Chinese economy.

China is the largest consumer of nickel in the world, with a majority of the metal destined to be used in the production of stainless steel, but a beleaguered real estate sector and broad economic deflation have dampened demand.

Nickel found pricing support in September as the Chinese government introduced a raft of stimulus measures that were intended to boost economic growth in the country. Among the measures included a 0.5 percent interest rate cut to existing mortgages and reduce the downpayment to purchase a home to 15 percent from 25 percent.

Although the package was responsible for a surge in nickel prices, in the weeks following the announcement nickel prices retreated, once again approaching yearly lows.

In another attempt to jump-start the economy, China introduced a US$1.4 trillion dollar debt swap on November 11 aimed at tackling “hidden debt” and freeing up funds at the local level by reducing interest payments on debt and helping drive growth.

Additionally, the Chinese government is planning to cut the deed tax for homebuyers to 1 percent from the current 3 percent in a further attempt to prop up the country’s economy.

Western governments may not be working hard enough for critical supply

In Canada, the government pledged C$46 billion for the development of four EV battery production plants that will require more raw materials than the Canadian mining sector can currently supply.

At his address to the Greater Vancouver Board of Trade on September 17, Mining Association of Canada President Pierre Gratton suggested Canada is too focused on downstream development and that in order to meet supply the four EV plants will need the support of 15 new mines.

“That’s only speaking from the standpoint of the four battery factories, to say nothing about all of the other needs that our economy requires, or that the US requires, including its defence industries. Unless we achieve the above, and this is the irony, our reliance on foreign sources for minerals and metals is only going to increase,” he said.

Overall, Gratton believes that there needs to be an additional C$32 billion in financing for mining and midstream processing projects.

In Europe, the implementation of its new Carbon Border Adjustment Mechanism (CBAM) that places a tariff on carbon-intensive products is drawing concern from the industry. The regulation is a complex system designed to balance prices and prevent an exodus of carbon-intensive manufacturing to nations with fewer emission controls.

Some are suggesting CBAM has no benefit for the European stainless-steel industry as it limits pricing to scope 1 emissions and doesn’t include downstream emissions from power generation and transpiration.

European steelmakers have become more dependent on nickel pig iron imports from Indonesia, so far 87,485 metric tons through the first eight months of 2024 versus just 1,006 metric tons in 2023. The increase has come alongside a wave of curtailments as the industry reacts to a flood of Indonesian nickel.