Nickel Prices Continue to Fall in October 2023: What's the Outlook?

Nickel is one of the critical minerals used as a raw material for the production of stainless steel, metal casting, and electric vehicle batteries.

However, nickel prices have been steadily declining in recent months.

According to World Bank data, the average price of nickel with a minimum purity of 99.8% on the London Metal Exchange (LME) in October 2023 reached US$18,281 per ton.

This price is down 6.9% month-on-month (mom) and down 17% year-on-year (yoy).

The average nickel price in October 2023 also marked the lowest since the beginning of 2022, as shown in the graph above.

According to the World Bank, nickel prices have weakened due to reduced demand and increased supply.

"Nickel prices fell 9% in Q3 2023 compared to the previous quarter due to slowing Chinese battery demand and rapid growth in nickel supply, particularly from Indonesia," stated the World Bank in its October 2023 Commodity Markets Outlook report.

"Simultaneously, technological advancements have slowed the growth of nickel use in China, where companies are switching to lithium iron phosphate (LFP) batteries that do not require Class 1 nickel (minimum purity of 99.8%)," it continued.

Amid these conditions, the World Bank projects that the average nickel price for the whole of 2023 will fall 14% (yoy), and will fall another 10% (yoy) in 2024, before starting to improve in 2025.

"Increased demand for electric vehicle batteries is expected to support a nickel price rebound in 2025 and will be a key demand driver in the future," said the World Bank.