Superalloys

Nickel prices experienced sharp volatility from February through to April. A short-lived rally saw the metal climb to US$ 15,875 per tonne on February 6, driven by speculation over policy changes in the Philippines, although it ended the month slightly lower at US$ 15,590 amid market caution. Nickel regained momentum early the following month and, on March 12, reached its highest level to date in 2025 at US$ 16,720 per tonne. However, in late March and early April, prices plummeted as market sentiment soured, bottoming out at US$ 14,150 per tonne on April 8. This 15.4% drop in under a month was driven by macro-economic concerns and aggressive trade policy developments. As the dust settles on tariff announcements, LME nickel has made gains to around US$ 15,600 per tonne at the time of writing.

Indonesia remains the dominant player in global nickel supply thanks to massive Chinese-backed refining capacity. However, recent reductions in ore export quotas created raw material shortages, forcing smelters to import record volumes from the Philippines. Despite this, global refined nickel production has remained elevated, prolonging a supply glut that has weighed on prices.

In the Philippines, uncertainty was created by the proposed ban on raw nickel exports and rising mining royalties. The final policy, enacted on April 11, raised royalty rates to 14-19%, depending on price levels. While this move initially boosted prices, industry groups criticised it as “unrealistic”, warning of reduced investment and higher production costs.

The most impactful shift came from escalating US tariffs on Chinese goods which raised duties on some imports from China to 145%, prompting an 11.5% drop in LME nickel prices within a week. China, the largest global consumer of nickel, saw its manufacturing sector take a direct hit.

Tariffs not only weakened China’s demand outlook but also contributed to broader fears of a global economic slowdown. Analysts were expecting these measures to disrupt supply chains, inflate input costs and suppress global trade volumes, especially in metals-intensive sectors. The impact was expected to be most severe in China while also straining nickel demand from other trade-exposed economies in Asia and Europe. Just at the time of writing, notably, the USA and China have agreed to suspend most tariffs on each other’s goods.

Stainless steel remains nickel’s largest end-use sector. Despite a 10.6% year-on-year increase in Chinese stainless steel production in the first quarter of 2025, demand from real estate and appliances remained weak while EU carbon tariffs and anti-dumping measures curbed export growth.

Meanwhile, the electric vehicle battery sector saw declining nickel demand owing to a shift towards LFP (nickel-free) battery chemistries. Nickel-manganese-cobalt battery demand dropped 19% between January and February, and nickel’s share of battery demand fell to 11.5% in 2024. CNGR’s paused investment in its South Korean smelter further underscores this trend.

In conclusion, the nickel market was shaped from February to April by a mix of oversupply, shifting South East Asian policies and escalating trade tensions. While early March offered price optimism, the April tariff shock led to a steep price correction and exposed deeper weaknesses in global nickel demand.

With supply still high and demand vulnerable to macro-economic and geopolitical headwinds, nickel prices are likely to remain under pressure and volatile in the months ahead if there is no substantial supply-side restraint or policy-driven demand recovery.