Financial giant Goldman Sachs reported that there is a significant opportunity for short selling in the market as nickel supply will outpace possible demand growth and metal prices are trading at the top of the curve.
Goldman Sachs analysts pointed out that current nickel prices are at the top of the industry cost curve, emphasizing that this contradicts the supply scale adjustments necessary to limit the expected abundance in the future.
The Wall Street bank believes that the nickel market may face oversupply problems in the coming years and estimates that 218,000 tons of excess nickel will be released in 2023 and 306,000 tons in 2024, respectively.
According to Goldman Sachs, nickel prices are expected to average $19,000 per ton in the three-month period, while prices are expected to decline to an average of $16,000 per ton in the 12-month period.
Meanwhile, the bank also made assessments for copper, raising its three-month copper target from $7,750 per ton to $9,250 per ton, and the six-month target from $9,200/tonne to $9,500/ton.
