Nickel Market Alert: Global Surplus Nears 200,000 MT in 2025

Indonesia, the world’s top nickel producer, remains central to market dynamics.

SEATTLE (Scrap Monster): The International Nickel Study Group (INSG) warns that the global nickel market is bracing for intensified oversupply in 2025, with a projected surplus of 198,000 metric tons (MT), following consecutive surpluses of 170,000 MT in 2023 and 179,000 MT in 2024.

In an April 24 report, the INSG forecasts global primary nickel production to hit 3.735 million MT in 2025, far exceeding anticipated consumption of 3.537 million MT. The group highlights heightened uncertainty in raw material markets due to shifting global trade policies.

 Nickel, a critical component for stainless steel and electric vehicle (EV) batteries, has faced sustained price pressure amid oversupply. After declining over 7% in 2024, prices remained volatile in early 2025, sinking to $15,000/MT in April—a five-year low—driven by overproduction, ore shortages, and geopolitical tensions, including U.S.-China tariff escalations.

Indonesia, the world’s top nickel producer, remains central to market dynamics. While its refined nickel output stays high, delays in mining permits have tightened ore supplies. The country produced an estimated 2.2 million MT of nickel in 2024, accounting for over half of global output. However, recent royalty hikes (from 10% to 14–19%, tied to nickel prices) sparked industry backlash, with stakeholders calling the move “unrealistic” and misaligned with sector realities.

The Philippines, meanwhile, is considering following Indonesia’s earlier playbook by banning raw nickel exports, raising risks for global supply chains reliant on Southeast Asian ore.

China’s primary nickel production is expected to rise in 2025, fueled by expanded nickel cathode and sulfate capacity, even as nickel pig iron output declines. Yet demand in the world’s largest nickel consumer faces headwinds: U.S. tariffs and sluggish activity in construction and appliance sectors are dampening stainless steel demand. Despite a 10.6% year-on-year increase in Q1 2025 stainless steel output, analysts predict continued oversupply.

EV battery demand for nickel has also underperformed expectations. Rising adoption of nickel-free lithium iron phosphate (LFP) batteries and consumer preference for plug-in hybrids over full EVs are curbing nickel’s growth prospects.

New U.S. tariffs announced on April 2 sent nickel prices plunging 11.5% within a week, with midstream battery products and downstream EVs hit hardest. CRU Group analyst Thomas Matthews noted that U.S. tariffs on Chinese energy storage batteries and EVs will soon reach 173% and 143%, respectively. While cobalt and lithium imports remain exempt, nickel faces no such relief, exacerbating trade challenges.

With surplus forecasts mounting and demand signals weakening, the nickel market confronts another turbulent year. Industry players must closely monitor policy shifts and supply chain adjustments reshaping global nickel trade dynamics.

Courtesy: www.nai500.com