US Nickel Market Flat Amidst Excess Inventories

US Nickel

The US spot premiums for refined nickel have remained stagnant this week due to sluggish demand and abundant consumer inventories.  This market flatness reflects a cautious approach from buyers who are well-stocked for the near future.

Premium Assessments and Demand Outlook

Nickel premiums for full truckload melting grade, 4x4-inch cathodes, were assessed at 60-65¢/lb, while premiums for briquettes were assessed at 30-35¢/lb. Both remained unchanged from the previous week.  Many consumers are currently holding excess inventories, which is limiting nickel demand forecasts through the first quarter of the year.  Market sources suggest that most buyers are unlikely to actively participate in the spot market for additional nickel until early summer.  This points to a period of potentially subdued activity in the US nickel market.

Global Supply Dynamics and Price Outlook

Despite the current inventory surplus, potential supply-side changes could impact the market later in the year.  Indonesia, the world's largest nickel producer, is reportedly considering cutting production by up to 35%, according to sources.  Such a significant reduction could strain global nickel supply and potentially help nickel prices recover after they reached a four-year low in December.  However, overall, nickel is still expected to be in surplus this year. 

Global nickel stocks in London Metal Exchange (LME) warehouses totaled 164,310 metric tonnes (t), up 1.1% from 162,474t the previous week. Inventories have increased significantly in 2024, rising by 150% or 96,378t.  

The LME nickel daily cash month-to-date average for January is $15,055/t ($6.83/lb), compared to the full-month December average of $15,471/t ($7.02/lb). The official three-month LME nickel settled at $15,450/t on Thursday, up 1% from $15,295/t a week ago on January 2nd.  These price fluctuations and inventory levels will continue to be closely watched by market participants.