The worldwide nickel market began 2025 with an oversupply dilemma. In accordance with the Worldwide Nickel Examine Group (INSG), the market is anticipated to face a provide surplus of 198,000 metric tons (mt) this yr. That’s greater than the excess of 179,000 mt recorded in 2024 and 170,000 mt in 2023.
Insert additionally predicted that manufacturing of major nickel is projected to achieve 3.735 million mt in 2025, whereas international utilization is forecast at simply 3.537 million mt. This imbalance continues to overwhelm prices and investor sentiment, particularly throughout Asia.
Nickel Demand Stoop More likely to Drag Into 2025
The EV sector is the first demand driver for nickel. The EV sector, whereas increasing in China and Europe, is shifting battery preferences. Automakers are transferring away from nickel-heavy nickel-manganese-cobalt (NMC) batteries towards nickel-free lithium-iron-phosphate (LFP) batteries, that are extra cost-efficient.
In China, the share of NMC batteries dropped to 19% of complete manufacturing in January and February 2025, based on the China Automotive Battery Innovation Alliance. This shift has put downward strain on nickel sulfate costs, regardless of expectations of upper consumption in 2025.
- S&P Global highlighted that international nickel demand from batteries was round 384,000 mt Ni in 2024 and is forecast to develop to 543,000 mt Ni in 2025.
But, the market stays underutilized resulting from extra manufacturing capability and desire for various battery chemistries. Thus, on the demand facet, the market stays sluggish.
2025 Chinese language NMC Manufacturing Additional Declines to 19%
Oversupply Weighs on Nickel Costs Regardless of Early-Yr Momentum
Nickel costs confirmed a short uptick at the beginning of 2025, however the momentum shortly light resulting from ongoing supply pressure and sluggish demand. Costs opened the yr at $15,040 per metric ton on January 2, rising to $16,080 mid-month earlier than dipping once more.
As per S&P World,
- The LME 3M closing nickel worth dropped to a near-five-year low of $14,084/t on April 9 from $16,107/t on April 1.
- By the top of Q1, costs had settled round $15,545/t.
What occurred to the nickel worth in Q1?
U.S. Nickel Probe Might Spark Quick-Time period Worth Soar
Commerce tensions below the Trump administration are making nickel markets much more unstable. The excessive tariffs might improve prices for EV batteries and stainless-steel, additional weakening nickel demand.
Nevertheless, on April 15, the U.S. authorities started a probe into imports of processed crucial minerals like nickel below Part 232 of the Commerce Enlargement Act. The Commerce Secretary should submit a report back to the President inside 180 days.
Trump earlier used Part 232 to impose 25% tariffs on metal and aluminum. Refined Class 1 nickel was not hit by the April 2 tariffs, however which may change after the brand new evaluation.
A current copper probe induced copper shares to shift to the U.S., pushing up costs on the London Metallic Trade (LME). If the identical occurs, nickel stocks may drop, and nickel costs might additionally rise quickly.
Asia’s Nickel Market Pressure in Q1
Indonesia and China are making extra value-added nickel merchandise like nickel sulfate and nickel cathodes. These are utilized in electrical automobiles (EVs) and batteries.
Thus, Asia continues to guide international nickel provide progress.
- Indonesia is ready to spice up its manufacturing from 1.6 million metric tons in 2024 to 1.7 million metric tons in 2025, protecting its spot because the world’s prime producer.
- China comes subsequent, with output rising from 1.035 million metric tons in 2024 to 1.085 million metric tons in 2025.
- The Philippines shipped 54 million metric tons of nickel ore in 2024, with 43.5 million metric tons going to China.
Nevertheless, the Indonesian authorities is delaying permits (RKABs), making the availability of nickel ore considerably tight. But, the nation nonetheless produces a considerable amount of refined nickel.
Moreover, Manila is now contemplating a ban on uncooked nickel exports. If that occurs, China’s nickel provide chain might take a serious hit.
Jason Sappor, metals and mining analysis senior analyst at S&P World Commodity Insights, has revealed his insights by noting,
“Amid an unstable global macroeconomic backdrop, we expect the global primary nickel market to remain oversupplied in 2025, with production from Indonesia forecast to expand further this year, despite challenges like tight nickel ore availability and a potential royalty rate hike on nickel products by the government.”
Feb 2025 China Nickel Ore Imports Down 6.3% y-o-y
Tax Hike and Shrinking Income
Indonesia recently raised mining royalties from 10% to as excessive as 19%, based mostly on nickel costs. These new charges goal to fund authorities applications below President Prabowo Subianto. Nonetheless, low-grade nickel used for EV batteries will see a decrease 2% royalty.
These tax hikes have pushed manufacturing prices greater and induced nickel costs to rise in March. However the future stays unsure. Miners warn of shrinking earnings resulting from rising bills and restricted ore provide.
In the meantime, Chinese language corporations are pulling again. Nickel large CNGR has paused its South Korea mission, exhibiting buyers are rising cautious in a unstable nickel market.
Conclusion: Surplus to Persist, Costs More likely to Keep Low
Trying forward, the nickel market is anticipated to stay oversupplied all through 2025. INSG forecasts a 3.8% improve in international nickel production this yr, after a 4.6% rise in 2024.
Lastly, as we will see, policy-driven worth volatility resulting from new royalties, commerce tariffs, and battery chemistry shifts will proceed to maintain nickel costs low.
