Nickel Market Turns as Indonesia Dominance Sparks Allied Supply Response
After two years of price volatility driven by Indonesia’s surge in Class 1 nickel production, the market is showing signs of structural change. While oversupply pushed prices down in 2024, demand growth from EVs, energy storage, and stainless steel is set to absorb excess capacity faster than expected. At the same time, G7-aligned nations are accelerating investment in non-Indonesian, FEOC-compliant sources—driven by policy and buyer preference.
Key Points:
Indonesia now accounts for more than 50% of global nickel supply, largely processed via Chinese-controlled HPAL and NPI-to-matte routes.
https://www.reuters.com/markets/commodities/indonesia-nickel-output-2025-06-20/BHP announced a $300M expansion at its Nickel West operations in Australia to meet rising IRA-compliant battery demand.
https://www.bhp.com/news/media-centre/2025/07/bhp-approves-expansion-of-nickel-westCanada Nickel Company secured provincial support for its Crawford Project, one of the largest undeveloped Class 1 nickel sulfide deposits in the world.
https://canadanickel.com/Korea Zinc confirmed its “all-in-one” nickel refinery will be operational in 2026, targeting pCAM and battery-grade output for allied buyers.
https://www.koreanzinc.co.kr/eng/
Why It Matters:
Market Rebalancing – Current oversupply masks the risk of a price spike if allied supply sources lag EV demand growth.
Policy Pull – IRA and EU battery regulations create preference for FEOC-compliant Class 1 nickel, tightening available supply for Western buyers.
Processing Leverage – Midstream capacity, not just mining, will determine which producers capture premium contracts.
Watchlist Companies:
BHP Group – Expanding IRA-compliant nickel production in Western Australia.
https://www.bhp.com/Canada Nickel Company – Advancing large-scale Class 1 sulfide project in Ontario with integrated carbon capture potential.
https://canadanickel.com/
Critical Minerals Spotlight:
Nickel (Class 1) – Required for high-nickel cathodes in long-range EV batteries.
Cobalt – Often co-produced with nickel, making nickel project timelines relevant to cobalt supply forecasts.
Action Points:
Monitor progress on allied nickel projects for commissioning timelines; oversupply narratives may reverse quickly.
Track Korea Zinc’s refinery buildout as a strategic midstream asset in the G7 supply chain.
Evaluate exposure to nickel sources that are FEOC-compliant versus those tied to Chinese-controlled production.
Watch for automaker and battery OEM offtake agreements as a signal of tightening premium supply.
https://444Critical.com
This update is for informational purposes only and is not financial or legal advice. Information is believed accurate but not guaranteed.