He forecast LME money nickel costs at $17,379 per metric ton this yr, down from $21,491 per ton final yr.
Money nickel on the London Steel Change (LME) was buying and selling at round $17,500 a ton on Thursday.
The worth might rebound to $20,500 per ton in 2025 and steadily rise to $23,000 per ton in 2028, Lennon stated.
Mining approvals in high producer Indonesia confronted delays this yr for varied minerals together with nickel, inflicting a drop in ore inventories at smelters and forcing some firms to import ore from the Philippines.
The Indonesian authorities authorised manufacturing quotas, generally known as RKABs, for round 240 million metric tons of nickel ore yearly for the following three years.
That fell wanting the 260 million tons ore demand estimated by the Indonesian Nickel Miner Affiliation (APNI) this yr.
As of this week, solely round 220 million tons of annual output has been authorised this yr, resulting in shortages at smelters, APNI Secretary Basic Meidy Katrin Lengkey advised the identical convention.
Smelters have decreased their ore inventories “very, very dramatically”, Macquarie’s Lennon stated.
“Listening to what we do hear concerning the ore provide limitations, I we expect that (nickel metallic oversupply this yr) is now in all probability more likely to be between 50,000 and 100,000 tons, reasonably than over 100,000 tons,” Lennon stated, referring to Macquarie’s earlier estimate.
Amid low costs and rising prices, nickel producers equivalent to BHP and Anglo-American, are additionally slashing output, he stated.
On demand, Lennon stated main nickel consumption globally is predicted to develop 8.9% to three.53 million metric tons this yr, in comparison with the 6.3% progress in provide.
Paul White, secretary basic of the Worldwide Nickel Examine Group, advised the convention that main nickel demand is estimated to extend by 7.9% this yr, much like final yr.
Sturdy chrome steel manufacturing in China and Indonesia will underpin nickel demand, Lennon and White stated.
Lennon added that nickel consumption within the battery sector, which stalled final yr resulting from excessive battery stockpiles, will resume its progress in 2024.
Jerome Baudelet, gross sales and advertising director of nickel & lithium at French miner Eramet, stated demand for nickel for batteries is predicted to leap to 2.7 million tons in 2035, representing 48% of worldwide nickel demand, up from 687,000 tons in 2025.
(By Fransiska Nangoy, Siyi Liu and Mai Nguyen; Modifying by Florence Tan and Susan Fenton)