As prices of nickel have fallen more than 40 per cent due to the international glut, an expert in commodity metals warns the downturn could go further and last for several years.

Bloomberg News reported on Monday that nickel prices had fallen over 40 per cent on an annual basis, as Indonesia has heavily bet on the metal used for stainless steel and electric vehicle batteries, but has now oversupplied the market.

Frank Nikolic, VP of base and battery metals at the CRU Group, believes the prices will remain low for the foreseeable future.

“Since the EV boom started, Indonesia has been producing a lot of nickel backed by Chinese companies,” he told BNN Bloomberg in a television interview on Thursday. Nikolic added that in 2022 and 2023 “we had two consecutive years of large surpluses and we anticipate that supposed to continue over the next several years.”

Nikolic said the Indonesian nickel is easy to extract and the Chinese firms have become “incredibly efficient” at mining it.

“Everybody on the western side of the world has been quite surprised by what they've been able to accomplish and kudos to them, but it's driving the market to surplus and hence, we see the prices as they are,” he said.

Still, Nikolic doesn’t anticipate major mine closures or layoffs due to the surplus.

“Certainly there's going to be cutbacks in terms of exploration in terms of state capital and capital deferrals,” he said, adding “there's a lot of it's a margin to absorb the low prices that we see today.”