Oversupply and Demand Forecasts

The global nickel market is tipped into oversupply, with production growth outpacing demand for several years ahead. Speakers at a June 2025 industry forum warned that expansions (notably in Indonesia) and cooling demand growth will sustain a surplus until at least 2027–2028.

Indonesia alone now accounts for roughly 63% of world nickel output, after a surge of new projects that halved benchmark prices over the past three years.

London Metal Exchange (LME) nickel, which hit an all-time high above $48,000/ton in early 2022, sunk to a five-year low of $13,865 in April 2025 amidst this glut. By June 2025, LME prices had only recovered to the mid-$15,000s – a level that analysts say hovers just above the marginal cost for many producers.

Current production and demand forecasts underscore the imbalance. The International Nickel Study Group (INSG) projects primary nickel output at 3.735 million tonnes (Mt.) in 2025 versus usage of 3.537 Mt, implying a surplus of about 198,000 tonnes.

This follows estimated surpluses of 170,000 tonnes in 2023 and 179,000 tonnes in 2024.

Even though global nickel demand is still growing (around 5–8% annually), supply is growing faster, boosted by Indonesia’s low-cost capacity boom.

Prices on the Shanghai Futures Exchange (SHFE) have mirrored LME’s decline, trading in a narrow ¥120,000–130,000/ton range in early 2025 (roughly equivalent to $15,000–16,000) after sliding alongside LME quotes.

Notably, Chinese prices at times flipped to a discount relative to LME – a reversal from the usual import-premium – as excess metal flowed into China.

Meanwhile, nickel demand growth has underperformed bullish expectations, particularly in batteries.