All eyes on nickel

Opposing headwinds persist for both the short-term and long-term nickel outlook amid a current supply glut which has pressured prices lower amid concerns over mining and potential tariffs.

At the very start of 2025 as the dollar climbed, nickel prices continued their downward descent, approaching the US$ 15 000 per tonne mark, a multi-year low. By mid-January, prices had recovered some ground back towards US$ 16 000 per tonne.

A slew of forecasts by the banks and research houses anticipates an ongoing supply glut and surplus for the year ahead, which is likely to keep pressure on prices. For example, a report by ING notes that, as Indonesian supply has increased despite recent permitting issues, some mines have been forced offline, including several in Australia.

Despite the supply cuts seen during 2024, rising primary nickel from Indonesia will keep the market in surplus. World primary nickel production is forecast to reach 3.515 million tonnes in 2024 and 3.649 million tonnes in 2025, although ING commodities strategist Ewa Manthey suggests production could shutter if prices stay low.

Disappointing demand

Slowing electric vehicle (EV) sales and growth in lithium batteries has also dented nickel demand. Manthey also notes that demand from the stainless steel sector, the biggest market for the metal, mostly disappointed during 2024. The main downside risk for nickel in 2025 is seen as slower uptake of EVs and the possible removal of some of the EV incentives as President Trump returns to the White House.

Nickel was one of the worst performing metals on the London Metal exchange during 2024, with ING referring to its performance as ‘dire’ and suggesting this is likely to continue during 2025.

It forecasts nickel prices at US$ 16 000 per tonne in Q1 2025, US$ 15 800 in Q2 and US$ 15 500 during Q3 & Q4, with prices across the year averaging US$ 15 700 per tonne. The main upside is linked to stronger stainless steel output and restricted ore supply from Indonesia.

Meanwhile, Fitch Ratings maintained its spot LME nickel forecast of US$ 16 000 per tonne for spot for 2025, before dipping to US$ 15 000 in 2026. It sees stainless steel demand in 2025 as ‘robust’.

Quota cuts?

The possibly of restricted supply came to the fore during January, with media reports suggesting the Indonesian government could reduce nickel mine quotas below the 272 million tonnes permitted for 2025.

Although these have not yet been confirmed, the country is said to be seeking to preserve its resources and enforce environmental standards. Macquarie has said that, although unlikely, potential cuts of up to a third of global supply could result in an upward price risk, and it continues to see the market in a small oversupply this year.

Trump’s return to power is likely to cause uncertainty globally amid his threatened tariffs. These taxes could also impact neighbouring Canada’s nickel industry, which is a large supplier to the country.

Meanwhile in the US itself, some are expecting increased production at sites where permits have previously been denied, with the President already issuing executive orders rolling back environmental protections for mining, oil and gas.

Read the full nickel & stainless market update in our upcoming issue >>