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Informist, Tuesday, Sept. 30, 2025

MUMBAI – FitchSolutions company BMI expects nickel prices to average $15,400 per tonne in 2025, against its previous projection of $15,000 per tonne. The rise is supported by BMI's expectation of the US dollar weakening, prospects of US Federal Reserve rate cuts, persistent policy-driven turbulence in Indonesia, and broadly stable demand conditions. However, beyond 2025, the firm expects nickel prices to face downward pressure and sees moderate growth than previously anticipated due to the ongoing rise in Indonesian nickel production.

"On the macro front, we expect further US dollar weakness — with the US dollar index down 9.9% in the ytd (year-to-date) to 98.5 as of September 25 — to remain a key tailwind for nickel prices in the coming months," BMI said. Prices of the metal are up 1.3% so far this year at $15,279 per tonne as of Thursday, successfully demonstrating strength against both US President Donald Trump-induced global trade disruptions and the persistent surge in Indonesian supply.

The US Fed lowered the Fed Funds rate by 25 basis points to 4.00-4.25% on Sept. 17, marking the first rate cut in nine months and a clear shift in US monetary policy. Markets are now pricing in two more Fed rate cuts across the two final meetings of the year, which is likely to improve sentiment and underpin further gains in nickel prices in the months ahead, BMI said. Amid growing expectations of a more dovish Fed, the underlying narrative for nickel remains consistent, with Indonesia's supply surge to continue to keep prices under pressure.

BMI expects refined nickel production in Indonesia to rise 9% on year to 1.7 million tonnes in 2025. "That said, recent government measures to tighten sector oversight and extract more value from domestic industry amid a global lowprice backdrop have lifted sentiment in 2025. The prospect of further intervention is keeping market participants on edge and will likely continue to do so, helping to place a floor under prices," it said.

Despite demand for nickel expected to remain solid due to increased stainless steel output and a rise in electric vehicles, led by global consumer China, the firm has lowered its global demand growth forecast for the metal to 4.2% from 4.9% due to softer global growth and heightened trade risks. According to the World Stainless Association, China's stainless steel output rose 4.8% to 20.2 million tonnes in the first half of 2025. Data from the Chinese National Bureau of Statistics showed that electric vehicle production surged 36.2% to 6.9 million units during the same period, the report said.

Nickel prices are likely to rise in the long term as the market surplus narrows on the back of a surge in demand for nickel, growth in the stainless steel sector, and a rise in production of electric vehicle batteries, BMI said. At 1312 IST, the three-month nickel contract on the London Metal Exchange was 0.6% lower at $15,240.0 per tonne.  End

US$1 = INR 88.76

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

Reported by Udita S. Jaiswal

Edited by Avishek Dutta

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