Nickel Prices Plunge to Five-Year Low Amid Oversupply, Cost Rise, and Trade Tensions

Published: Apr 25, 2025 19:03

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Nickel prices fell to a five-year low of around USD 15,000/ton in Q1 2025, a sharp decline from over USD 20,000/ton in May 2024. The main causes include oversupply, rising costs, and weak demand. As the world’s largest nickel producer, Indonesia saw a slowdown in production growth and implemented a new tax policy starting April 26, which increased royalty rates on nickel products—further worsening the challenges faced by nickel producers already under pressure from rising ore prices.

Tensions in U.S.-China trade relations, particularly a new round of tariffs imposed by the U.S., have further fueled market pessimism. Following Trump's tariff announcement on April 2, nickel prices on the London Metal Exchange dropped 11.5% within a week. These tariffs could suppress China’s manufacturing activity, thereby weakening demand in the world’s largest nickel-consuming country.

Although electric vehicle adoption continues to grow, the growth rate of nickel demand in the battery sector has slowed significantly, as manufacturers shift toward more cost-effective nickel-free battery chemistries such as lithium iron phosphate (LFP) batteries. Between January and February 2025, demand for nickel-containing NMC (nickel-manganese-cobalt) batteries fell by 19%. In 2024, the battery industry accounted for approximately 11.5% of total nickel demand.

Data Source Statement: Except for publicly available information, all other data are processed by SMM based on publicly available information, market communication, and relying on SMM‘s internal database model. They are for reference only and do not constitute decision-making recommendations.

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