Vale Launches Strategic Review of Thompson Nickel Operations Amid Market Challenges

Nickel market struggling with oversupply

Nickel prices entered 2025 in the US$15,000 to US$15,200 per metric ton range.

The metal struggled to gain momentum last year, with increased output from Indonesia and limited growth in demand from key sectors such as stainless steel and electric vehicle batteries.

Ewa Manthey, commodities strategist at ING, noted that the market surplus is unlikely to ease in the near term.

“We believe nickel’s underperformance is likely to continue — at least in the near term — amid weakening demand and a sustained market surplus,” she said in comments emailed to the Investing News Network.

China’s recent steps to support its economy, which include a US$1.4 trillion investment plan over the next five years, may influence nickel demand indirectly. However, analysts caution that measures introduced in 2024 had limited effects on China’s housing and manufacturing sectors, which are key drivers of stainless steel consumption.

Indonesia, the world’s top nickel producer, continues to play a central role in the market surplus. Its expanding nickel output, supported by significant Chinese investment, has solidified its dominance in the industry.

However, there are indications that Indonesia may consider curtailing production to stabilize prices. Reports suggest that the Indonesian government is evaluating deeper cuts to nickel-mining quotas.