Nickel's New World Order: Oversupply, Margin Pressures, and the Indonesian Surge

By DONG-YU STAINLESS STEEL ENTERPRISE CO., LTD.

The global nickel market is undergoing a structural reset. Once celebrated for its indispensable role in stainless steel and electric vehicle (EV) batteries, nickel now faces a new reality, oversupply, margin erosion, and an uncertain growth horizon.

Indonesia's Dominance: A Double-Edged Sword

Indonesia, now accounting for over 63% of global nickel supply, has rapidly transformed from an ore exporter into a refining giant. According to Jim Lennon of Macquarie, multiple Indonesian projects are nearing completion, promising yet another wave of production that may extend the current surplus through 2027-2028.

As of June 6, 2025, nickel traded at around $15,380 per metric ton on the London Metal Exchange, well above the April low of $13,865, yet still a far cry from its $48,000 high in early 2022.

$15,000: The Market's Breaking Point

Lennon notes that $15,000 is a critical cost threshold. If prices dip further, nearly half of today's nickel producers would operate below cost. The pressure is already visible: Denis Sharypin of Norilsk Nickel reveals that about 25% of global producers are currently losing money on a cash-cost basis.

Even Indonesia is feeling the squeeze. Steven Chen of Yongqing Group (a subsidiary of Tsingshan) confirms that nickel pig iron (NPI) smelters are under intense margin pressure. Many smaller operations are on the verge of curtailments—or outright shutdowns.

Battery Demand Revised: The Rise of LFP

While nickel was once seen as a cornerstone of the EV revolution, the rapid shift toward lithium iron phosphate (LFP) batteries has cooled that narrative. Macquarie has downgraded its 2030 forecast for nickel demand in batteries to 967,000 tons, down from 1.5 million tons projected just two years ago. In 2024, actual consumption was only 518,000 tons.

What Comes Next? A Tighter Supply Narrative May Be Ahead

Indonesia’s mining ministry has signaled intent to manage ore supply to support pricing, suggesting that a policy-based stabilization effort may be underway. But the road ahead remains volatile.

Strategic Takeaway from DONG-YU 

At DONG-YU STAINLESS STEEL ENTERPRISE CO., LTD., we recognize that market shifts are not merely challenges, they are signals. The oversupply of nickel, changing battery chemistries, and fragile cost structures across the value chain are reshaping procurement strategies and risk planning.

As a stainless steel solutions provider with a global footprint, we are actively navigating this evolving landscape, prioritizing value over volume, partnering with stable upstream sources, and reinforcing our quality-first philosophy.

We believe this is not just a nickel cycle; it is a redefinition of what sustainability, strategy, and supply mean in the next era of global industry.