After peaking above US$20,000 per metric ton (MT) in May 2024, nickel prices have trended steadily downward.
Behind the numbers is a persistent oversupply driven by Indonesia’s high output, the world’s largest nickel producer.
At the same time, demand from China’s manufacturing and construction sectors, a traditional driver of stainless steel, has been weak as the country’s beleaguered real estate sector continues to find its footing.
Read on to learn what other key factors moved the nickel sector in 2025.
Nickel price in Q4
There wasn’t much change at the start of the quarter; the price was essentially trading in the US$15,000 to US$15,500 range, the same as it had since recovering from the post-liberation day tariff announcement rout in the base metals market in April that sent the price spiraling to a year-to-date low of US$14,150.
Nickel price, December 19, 2024, to December 18, 2025.
Chart via TradingEconomics.
However, cracks began to form at the end of October as it became clearer that the oversupply situation was likely to persist, pushing prices back below the US$15,000 mark by mid-November.
Prices for nickel rebounded in late November, but failed to break the US$15,000 again and slid toward a yearly low, reaching US$14,235 on December 15.
Oversupply continues to weigh on nickel
At the end of the year’s third quarter, the expectation was that nickel prices would carry momentum as the monsoon season arrived in the Philippines; however, despite seasonal declines in output, the market ‘s supply glut persisted, and prices continued to trend lower at the end of the period.
As of September 30, London Metal Exchange (LME) warehouses held 231,504 MT of nickel, and by November 28, stockpiles had grown to 254,364 MT, nearly 100,000 MT higher than the start of 2025.
According to a mid-December Shanghai Metals Market article, refined production decreased by 25,800 MT in November. Still, it was outpaced by inventory accumulation, as downstream demand remained soft.
On the demand side, stockpile buildups coincided with the traditional off-season for stainless steel producers, which accounts for 60 percent of total nickel demand, and weak end-use consumption led some producers to initiate output cuts. Additionally, Shanghai Metals Market notes that stainless demand was further impacted by the superior economics of recycled materials. The outlet also states that although production costs in Indonesia are lower than elsewhere, the price of nickel is rapidly approaching producers’ break-even point.
In February, the Indonesian government changed its quota system, increasing nickel ore output to 298.5 million wet metric tons from 271 million wet metric tons in 2024. The move from the top nickel producer was designed to alleviate supply pressures, with increased production limited to major production areas.
This was followed in October by a change to the length of time production quotas were valid, shortening it to one year from three years, and forcing miners to reapply for previously approved quotas for 2026 and 2027.
Changes were made to the application system after companies failed to meet environmental obligations, and companies will now have to submit proof they have the financial means to remediate land after operations are complete.
Adding to the metal’s woes at the end of the year is demand from the electric vehicle (EV) sector slipping as more battery producers pivot away from nickel in their chemistries, as cheaper lithium-iron-phosphate batteries improve efficiency.
For her part, Manthey, explained that everything has aligned for a bear market.
“LME stockpiles are at a four-year high, with Chinese and Indonesian cathode dominating,” she said, adding that growth in battery metals was slower than expected, and that demand for stainless steel was sluggish on the back of global weakness in manufacturing.
How did nickel perform for the rest of the year?
The rest of the year wasn’t much different for nickel.
The oversupply situation carried over from 2024, with Indonesian producers making up roughly 60 percent of the market. Likewise, curtailments continued among western producers as prices were unable to cover costs.
In April, the Indonesian government made a significant change to its royalty rates, hiking them to between 14 and 19 percent, depending on the nickel price. That’s up from the country’s previously imposed 10 percent flat rate, with a 2 percent royalty on nickel mattes destined for battery production.
As the second quarter began, base metal prices sank amid rising expectations of a global recession following US President Donald Trump’s “Liberation Day” tariff announcement on April 2.
Markets rebounded after their initial tariff plans were walked back, following a bond market squeeze that pushed 10 year treasury yields up by more than half a percentage point.
Nickel faced further pressures in July as the One Big Beautiful Bill was signed into law in the US, ending the federal EV tax credit, as well as other tax credits for expanding charging infrastructure. The change came into effect on September 30 and eliminated a US$7,500 rebate on the purchase of new EVs. Before the end of the tax credit, data showed that American EV sales reached a record 1.2 million through the first nine months of 2025, with the share for EVs climbing to 12 percent in Q3 as consumers made purchases ahead of the program’s end.
Q4 data shows EV sales have declined significantly since the tax credit expired, and interest in EVs has fallen by 20 percent. The fall caused Ford Motor (NASDAQ:F) to pull back on its EV plans and take a US$19.5 billion writedown.
Investor takeaway
Nickel prices continued on a downtrend in 2025, and expectations aren’t much different for the year ahead.
Until the metal see ssustained upward momentum, it’s unlikely that curtailed western operations will be restarted.
For experienced investors, this may offer an opportunity to enter a market closer to the bottom than the top. However, until there is a significant correction in supply and demand fundamentals, the nickel market won’t have much of a tailwind, leading to a riskier market, that may have a lengthy period before returns are realized, if at all.
Securities Disclosure: I, Dean Belder, hold no direct investment interest in any company mentioned in this article.
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