Nickel prices have suffered the sharpest declines in the
base metals complex. Production cuts in response to
the lower prices have been announced, similar to other
metals, but also failed to produce sustained support
for prices. Nickel pig iron (NPI) production in China
has been negatively affected by Indonesia’s export
ban, but increased nickel ore imports from the
Philippines have kept production at higher-thanexpected levels. Indonesia is planning to add new NPI
production capacity with a few new projects but
overall progress remains low. The reversal of nickel
carry trades has also produced extra supply. The
International Nickel Study Group and Bloomberg
calculations indicate a surplus market for refined nickel
in 2015 while a deficit may appear in 2016. Overall, we
forecast prices stabilising at around $9800/tonne in
2016 before rising moderately into 2017.