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09 December 2024

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Nickel Weekly (02-06 December 2024): Avg. USD 15,720/ton (-0.4% WoW)

Recent Catalysts Driving the Price

  • In the last five trading days, average nickel prices slightly decreased to USD 15,720/ton (-0.4% WoW), mainly on inventory surplus amid increased production, particularly in Indonesia, and softer-than-expected demand growth, notably from electric vehicle (EV) sector.
  • On the other hand, In November, China's stainless steel production grew 3.0% YoY, with cumulative growth of 3.3% YoY, driven by 3.8% MoM increase in 200-series and 2.4% MoM growth in 300-series production. December projections indicate 6.3% MoM rise in 300-series and 10.7% MoM growth in 400-series output, fuelled by resumption of production lines and market adjustments.
  • Lack of market stimulus, persistent oversupply issues, and possible US-China trade war has us to maintaining our FY24 nickel price forecast at USD 16,900/ ton (YTD: USD 16,901/ton). Given minimal downside risk for nickel prices, we retain NCKL as our top sector pick, driven by anticipated earnings growth from capacity expansions and industry-lowest cash cost, with TP of IDR 1,200 (FY24 P/E: 8.6x).

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