Nickel Price Forecast: Top Trends for Nickel in 2025

Nickel market oversupply to continue in 2025

Indonesian supply is a key reason nickel prices are under pressure, as is a lack of demand growth.

In comments emailed to the Investing News Network (INN), Ewa Manthey, commodities strategist at ING, suggested that the situation isn’t likely to change for nickel in 2025.

“We believe nickel’s underperformance is likely to continue — at least in the near term — amid weakening demand and a sustained market surplus. A surge in output in Indonesia has dragged nickel lower over recent years, and demand from the stainless steel and electric vehicle (EV) battery sectors continues to disappoint,” she said.

Her statement follows recently introduced measures from China. Set to take effect in 2025, they involve injecting US$1.4 trillion over the next five years, and are meant to help the country’s ailing economy.

However, past measures introduced in 2024, particularly those in September, have yet to significantly affect the nation's housing and manufacturing sectors, which are net demand drivers for stainless steel.

Jason Sappor, senior analyst, metals and mining research, at S&P Global Commodity Insights, expressed similar sentiments about nickel's 2025 performance in comments to INN.

“We expect the market to remain oversupplied in 2025, as Indonesia and China’s primary nickel output expands further,” he said. Sappor added that subdued prices could lead to further output curtailments across the industry. This would be in addition to cuts already made at various operations around the world, particularly in Oceania.

The situation even has top producer Indonesia considering restricting output.

“The latest news reports that Indonesia’s government is considering making deep cuts to nickel-mining quotas to boost prices also highlight that the implementation of restrictions on the country’s nickel output should not be ignored as a risk to forecasts for the market to stay in surplus in 2025,” Sappor said.

For her part, Manthey suggested that cuts to nickel supply in 2024 did little to upset the market surplus — instead, they may have solidified Indonesia’s dominance over the industry.

“The recent supply curtailments also limit the supply alternatives to the dominance of Indonesia, where the majority of production is backed by Chinese investment. This comes at a time when the US and the EU are looking to reduce their dependence on third countries to access critical raw materials, including nickel,” she said.

Will Trump change the Inflation Reduction Act?

One of the biggest factors that could come into play in 2025 is Donald Trump's return to the White House.

During his campaign, Trump made several promises that could lead to a shift in the US’ environmental and energy transition policies. While nothing is set in stone just yet, the actions he takes could include reversing commitments made under the Paris Agreement and ending tax credits for EVs.

A significant unknown is how Trump will approach the Inflation Reduction Act (IRA).

The program, which was established under the outgoing Biden administration, was designed to stimulate a move away from fossil fuels, while also supporting the procurement of friendly supply of low-carbon nickel.

One part of the IRA has made it challenging for Indonesia to export nickel to the US. As it stands, EVs must meet foreign entity of concern (FEOC) rules to qualify for the US$7,500 tax credit outlined under the IRA.

The US considers nations like China, Russia, Iran and North Korea to be areas of concern. Under rule 30D of the act, these nations cannot control more than 25 percent of the board seats, voting rights or equity interests of any company that supplies critical minerals for EV batteries destined for the US.

This has been a major obstacle for Indonesia as it has worked to build a trade partnership with the US.

Manthey outlined how Trump may seek to tighten rules, making a trade pact with Indonesia more difficult.

“Indonesia has been trying to reduce China-based ownership of new nickel projects to help its nickel sector qualify for the IRA tax credits. Tighter FEOC rules would create more issues for nickel supply chains, and would be an obstacle to Indonesia’s goal of expanding its export market to the US,” she said.

Manthey also said if the rules are tightened, primary and intermediate production will continue to be sent to China.

Investor takeaway

Barring any major shift in the supply and demand environment, nickel prices are unlikely to see significant gains over the next year. For investors, this is likely to make for a less supportive environment.

“The surplus in the Class 1 market is reflected in the rising exchange stocks," said Manthey.

"Further inflows of Chinese and Indonesian metal into the exchange’s sheds could put additional downward pressure on the London Metal Exchange’s nickel prices," she added in her comments to INN.

For Manthey, the potential upside would be stronger stainless steel output or restricted ore supply from Indonesia. However, slower EV market growth or the cancellation of some incentives in the US could offset this.

Overall, she isn’t expecting large price movements in the coming year.

“We forecast nickel prices to remain under pressure next year as the surplus in the global market continues. We see prices averaging US$15,700 in 2025,” Manthey said.