Nickel

What it is

Nickel (atomic number 28) splits into two commercially separate forms. Class I, refined to at least 99.8% purity and deliverable on the London Metal Exchange (LME), feeds cathodes for nickel-manganese-cobalt (NMC) and nickel-cobalt-aluminium (NCA) EV batteries, electroplating, and aerospace alloys. Class II, chiefly nickel pig iron (NPI) and ferronickel, supplies stainless steel furnaces, which account for roughly 70% of total global demand. A surplus in one class does not relieve a shortage in the other; a Class I supply crisis can coexist with depressed overall prices. The main mine producers are Indonesia (about 60% of world mine supply as of 2025), Russia (Nornickel, guiding 193,000 to 203,000 tonnes for 2026), Canada (Vale, Sudbury and Voisey's Bay), and the Philippines. China dominates downstream refining and is the world's largest consumer of both forms.

History

Jakarta's January 2020 ore-export ban transformed the market. Chinese investment flooded into high-pressure acid leach (HPAL) plants and NPI smelters on Sulawesi; shipments of nickel matte from Indonesia to China rose nearly 28-fold between 2020 and 2023. Indonesia's mine-production share climbed from 31.5% in 2020 to roughly 60% by 2024. LME prices fell from about US$28,000 per tonne in late 2022 to near US$15,000 per tonne by late 2024. A March 2022 short-squeeze briefly drove prices above US$100,000 per tonne before the LME cancelled the trades, masking but not reversing the structural oversupply. The INSG recorded a 209,000-tonne market surplus in 2025, the third consecutive annual surplus.

Current state

The LME cash price sat near US$16,000 per tonne in early July 2026, below a US$17,635 per tonne peak in April 2026 when Indonesia's quota cut first moved the market. Jakarta reduced its 2026 RKAB mining-permit ceiling from 379 million tonnes to 270 million tonnes, a 30% cut framed by Indonesian Energy Minister Bahlil Lahadalia around four goals: price stabilisation targeting US$19,000 to US$20,000 per tonne, ore-reserve conservation, environmental compliance, and downstream-processing transition. By late June 2026, approved RKAB quota had hit that ceiling; the mid-year supplementary application window became the only remaining lever to close the gap between 270 million tonnes approved and roughly 340 to 350 million tonnes of smelter demand. Indonesian smelters began cutting output and importing Philippine ore to sustain feedstock. The INSG still projects a 261,000-tonne surplus for full-year 2026, largely because HPAL utilisation fell to 70 to 75% and sulphuric acid costs approached US$1,000 per tonne. Demand growth has also eased: lithium iron phosphate (LFP) chemistries, which require no nickel, gained EV market share through 2025 and 2026.

Relationships

Indonesia's HPAL cost crisis and the 2026 quota ceiling are the key supply-side levers on the global nickel price. Russia's Nornickel, tracked in EUはムルマンスク港の取引を禁止したがロシア産ニッケルは依然として西側市場に流入；ノリリスク・ニッケルの第1四半期生産は大幅減、中国との銅JV協議を加速, supplies a large share of Class I refined nickel; EU sanctions blocked the Murmansk export channel but investigators found persistent flows via third-country intermediaries and Finland's Harjavalta smelter. Commercial-scale battery recycling is beginning to return Class I material to supply, with Glencore's acquisition of Li-Cycle establishing the first integrated recovery network in North America. EU Critical Raw Materials Act strategic projects aim to open Class I supply outside the Indonesia-Russia axis, with 94 projects approved by mid-2026. Vale's Sudbury complex in Ontario, Canada, covered in Vale Base Metalsが2026年第1四半期に銅とニッケルで記録を達成、Glencoreとのサドベリー合弁は16億〜20億ドルの取引と2027年上半期のFIDを目指す, is one of the largest Western Class I producers, with a prospective Glencore joint venture valued at US$1.6 to US$2 billion that could reshape North American supply from 2027.

What to watch

Indonesia's Q3 2026 supplementary RKAB round will determine whether smelters recover enough feedstock to reverse output cuts; a large upward revision would cap the LME price well below the Indonesian government's US$19,000 to US$20,000 per tonne target. Nornickel's proposed copper concentrate joint venture with China's Xiamen C&D, targeting mid-2027, would accelerate the eastward shift of Russian Class I production and further reduce Western supply diversity. Competition between LFP and NMC-811 battery chemistries remains the central demand variable: a sustained rebound in NMC adoption would sharply tighten Class I availability. The US Inflation Reduction Act 45X advanced manufacturing credit, and its restrictions on foreign entity of concern (FEOC) sourcing, will shape where North American battery plants can legally procure nickel.