The International Nickel Study Group (INSG) has forecast a global nickel market surplus of 198,000 metric tons for 2025, marking the third consecutive year of oversupply as production continues to outpace demand. The group projects global primary nickel production will reach 3.735 million tons this year, while usage is expected to total 3.537 million tons. This persistent surplus follows surpluses of 170,000 tons in 2023 and 179,000 tons in 2024, reflecting ongoing expansion in nickel output, especially from Indonesia and China.
Indonesia remains central to these market dynamics, accounting for over half of global nickel output in 2024. However, the INSG notes that "delays in the issuance of mining permits" have created ore tightness, even as refined production remains high. The country’s newly increased royalty rates—ranging from 14% to 19% depending on nickel prices—have sparked industry concern, with stakeholders warning the hikes may not reflect current market realities. Despite these regulatory uncertainties, Indonesia is expected to continue expanding production, particularly of nickel pig iron (NPI).
China’s primary nickel output is also forecast to grow in 2025, driven by higher production of nickel cathode and nickel sulphate, even as nickel pig iron output is expected to decline. Demand in China faces headwinds from U.S. tariffs and sluggish activity in key sectors like construction and home appliances, with the nickel-intensive electric vehicle (EV) battery market expanding more slowly than anticipated due to the rising popularity of lithium iron phosphate (LFP) batteries.
Nickel prices have struggled under the weight of this growing surplus. After falling more than 7% in 2024, prices rebounded about 3% in early 2025, though they remain near five-year lows. Analysts attribute the price weakness to aggressive capacity expansion and moderating demand growth, particularly in the EV sector.
