Nickel price 2024: Your chances and risks The year 2024 is expected to bring some changes to the nickel market, which could present both opportunities and risks for investors. With the increasing demand for electric vehicles and renewable energy sources, the demand for nickel is also expected to rise. This could potentially lead to a rise in nickel prices, making it a profitable investment. However, there are also some risks to consider. The nickel market is highly volatile and subject to global economic and political factors. Any changes in supply and demand, as well as trade policies and regulations, could significantly impact the price of nickel. Furthermore, there is also the risk of technological advancements and alternative materials that could potentially replace nickel in certain industries. This could result in a decrease in demand and a decline in nickel prices. Investors should carefully consider these factors and conduct thorough research before making any decisions regarding nickel investments in 2024. While there is potential for profit, there are also potential risks that should not be overlooked. Stay informed and make informed decisions to navigate the ever-changing nickel market.

Last Updated: 19. Februar 2024By

Take a look at this chart (as of February 15, 2024, 3:00 pm):

Source: Frankfurt Stock Exchange ( )

Nickel price at rock bottom As you can see here, the strong negative development of the nickel price in dollars per ton on a one-year basis. In short: The steel and battery metal has recently been significantly affected by macroeconomic headwinds – mainly high interest rates, weak economic growth in some economies and the slow progress of electromobility.

For many commodity companies, nickel has become a burden. For example, Brazilian diversified metals conglomerate Vale had to acknowledge a decline in nickel prices of an average of -13.3% in the fourth quarter of 2023. Similar setbacks were also reported by Russian nickel giant Norilsk Nickel. And even the Swiss commodity giant Glencore is also feeling the effects.

Nickel mine in New Caledonia: Glencore pulls the plug Glencore is one of the world’s largest nickel producers. In view of the poor price development of the metal, the Swiss have now pulled the plug – thus sending another important signal for a possible counter-movement of the nickel price.

Specifically, Glencore, together with its partner Société Minière du Sud Pacifique SA (SMSP), will put the joint venture Koniambo Nickel SAS (KNS) on the French island group of New Caledonia in maintenance mode. This means that the unprofitable KNS nickel mine will be put on hold due to weak market prices. Glencore will finance the site for another six months and will seek a buyer for its stake in the meantime.

Swiss company also hits the brakes on nickel – and is not alone. Recently, nickel company Wyloo Metals announced mine closures in Australia. And even some smaller mining companies have had to throw in the towel.

China and Indonesia also slow down Interesting in this context is a new report from the news agency Reuters. It quotes some analysts whose figures support the ongoing consolidation. According to them, China and Indonesia, which together account for around 70% of the world’s nickel supply, will produce more than 100,000 tonnes less in the current year than in 2024. When adding in other announced production cuts, such as in Australia or New Caledonia, global supply is expected to decrease by -6% in the current year.

The calculation: By reducing output, the previous oversupply, especially from Indonesia, is to be countered. Market participants hope that nickel prices will receive support in a tightening market and finally switch to a sustainable upward movement.

Further nickel cuts likely Whether the production cuts announced so far will be sufficient to restore the balance between supply and demand remains to be seen. Some analysts point out that for a sustainable price upswing, further production capacities would have to be put on hold.

It is also important to keep an eye on production costs. These have recently risen significantly depending on the market and region. The nickel price would therefore have to rise disproportionately in order to not only offset the higher costs, but ultimately also enable a profit for the industry. Therefore, it would not be surprising if additional nickel locations are put under the microscope in the coming weeks and months.

What about demand? Is e-mobility on track? Supply is only one side of the coin, demand is the other. Economists expect global electric mobility, for which nickel is an important battery raw material, to accelerate more strongly in the current year and beyond than in the past two years.

Support is expected to come from the price wars in the electric vehicle market, the expansion of charging infrastructure and, last but not least, the tightening of government regulations. In the US, for example, the government could introduce new, much stricter rules on exhaust emissions as early as March. This would make combustion engine vehicles increasingly less attractive compared to electric cars.

My conclusion for you: Beware of Risks Nickel is and remains a highly exciting commodity. It is quite possible that the metal will generate better returns in 2024 and 2025. However, as an investor, you should not forget that nickel, as a component of batteries, reveals a rather high substitution risk. In modern LFP batteries, for example, such as those promoted by Tesla and BYD, no nickel is used anymore.

Of course, LFP batteries also have disadvantages and are unlikely to completely replace traditional batteries. In addition, nickel remains an important component of steel refinement. In my opinion, the long-term demand perspective for this metal is therefore riskier than, for example, for the all-rounder of the energy transition, copper.

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