Sumitomo Metal forecasts widening global nickel supply surplus in 2025
By Yuka Obayashi
TOKYO, Oct 9 (Reuters) -The global nickel market is poised for a larger surplus next year, driven by continued production expansion in Indonesia, Japan's largest nickel smelter Sumitomo Metal Mining 5713.T said on Wednesday.
The surplus will widen to 104,000 metric tons from 86,000 tons this year as Indonesia's output of low-grade nickel pig iron is expected to rise by 11.3% to 1.67 million tons, SMM said during its half-year market outlook presentation.
The country's production of high-grade nickel is also forecast to grow, it added.
Global demand for the metal in 2025 was seen increasing by 7.1% from this year to 3.55 million tons, while supply was likely to climb 7.4% to 3.65 million tons, SMM said.
Supply and demand in a lower purity form of so-called Class 2 nickel is expected to be roughly balanced next year despite higher NPI supply from Indonesia, SMM executive officer Yusuke Niwa said.
"But we expect a surplus in (the almost-pure) Class 1 nickel due to output expansion by Indonesia's new smelters," he said.
Nickel is primarily used in the stainless steel sector, but is also a critical component in lithium-ion batteries that power electric vehicles, where demand is set to surge in the coming years.
SMM, which supplies cathode materials for the Panasonic 6752.T lithium-ion batteries used in Tesla TSLA.O EVs, predicts that global demand for nickel used in batteries will grow to around 520,000 tons in 2025 from about 470,000 tons this year.
However, Niwa expressed caution about the outlook, noting: "The EV market environment looks quite difficult, except in China."
"While we anticipate next year's demand to grow by 50,000 tons from this year... there is a possibility it may fall short of that projection," he added.
Reporting by Yuka Obayashi; Editing by Jan Harvey
Related Assets
Latest News
Disclaimer: The XM Group entities provide execution-only service and access to our Online Trading Facility, permitting a person to view and/or use the content available on or via the website, is not intended to change or expand on this, nor does it change or expand on this. Such access and use are always subject to: (i) Terms and Conditions; (ii) Risk Warnings; and (iii) Full Disclaimer. Such content is therefore provided as no more than general information. Particularly, please be aware that the contents of our Online Trading Facility are neither a solicitation, nor an offer to enter any transactions on the financial markets. Trading on any financial market involves a significant level of risk to your capital.
All material published on our Online Trading Facility is intended for educational/informational purposes only, and does not contain – nor should it be considered as containing – financial, investment tax or trading advice and recommendations; or a record of our trading prices; or an offer of, or solicitation for, a transaction in any financial instruments; or unsolicited financial promotions to you.
Any third-party content, as well as content prepared by XM, such as: opinions, news, research, analyses, prices and other information or links to third-party sites contained on this website are provided on an “as-is” basis, as general market commentary, and do not constitute investment advice. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, it would be considered as marketing communication under the relevant laws and regulations. Please ensure that you have read and understood our Notification on Non-Independent Investment. Research and Risk Warning concerning the foregoing information, which can be accessed here.
