Nickel briefly tests level below $15,000/t

Market: Metals
08/01/25

Benchmark nickel on the London Metal Exchange (LME) fell below $15,000/t for the first time since October 2020 at the end of last week as the ongoing strength of the US dollar, increasing Class 1 oversupply and sluggish physical demand combined to sink the contract to a fresh low.

The three-month nickel contract fell to $14,995/t on 3 January, the lowest since 8 October 2020. The official price recovered this week and was at $15,380/t in today's official trade as the US dollar moved lower on reports that US president-elect Donald Trump is scaling back plans to impose sweeping tariffs on imported goods. Near-term direction is likely to be determined by a combination of macro factors, supply-demand shifts and Indonesian nickel pig iron (NPI) prices.

The global refined nickel market was in a surplus of 135,000t last year, according to Australian bank Macquarie. Russian Class 1 nickel producer Norilsk Nickel (Nornickel) pegged the total market surplus at 150,000t, approximately 130,000t of which is connected to high-grade production. The continuing rapid surge in processing capacity for Class 1 nickel metal in Chinese and Indonesian refineries is due to drive a rise in LME-held stocks to provide the biggest source of price downside this year, with Macquarie's research indicating 300,000t of new Class 1 refining capacity is due to come on line during 2024-26. Market participants surveyed by Argus through December said that Class 1 fundamentals are becoming aligned with the surplus story around other battery metals such as cobalt and lithium, with refined nickel due to be in structural oversupply for years to come on rich upstream and downstream Chinese investments.

The rise in Chinese and Indonesian origin high-grade nickel supply is set against a tight Class 2 space, driven by a drop in global production of nickel pig iron (NPI) and ferro-nickel. Macquarie said ferro-nickel and NPI output is projected to drop by 3pc year on year in 2024 even as global stainless steel production rises by 3.5pc. But over the same period, Indonesian and Chinese Class 1 and nickel sulphate output is expected to grow by 30pc year on year, adding 200,000t of nickel units in the market. This supply glut together with capabilities that allow NPI to be converted to LME-deliverable metal (via matte) will keep LME prices near the marginal cost of NPI plus conversion. Current NPI-class 1 conversion costs are pegged at $3,500-4,000t, market participants told Argus.

The spread between benchmark nickel on the LME and the Argus assessment for NPI 10-14pc China main port duty unpaid fell from $6,720.44/t at the end of the second quarter of 2024 to $4,093.33/t at the end of December. Three-month nickel on the LME shed 14.5pc in the second half of 2024, while the Argus NPI assessment rose by 2.23pc over the same period to show a closer alignment of the global benchmark with NPI conversion costs.

The narrowing of this spread is likely to increase the positive correlation between nickel prices and nickel ore prices this year. Tight ore supply in New Caledonia and Indonesia led to a surge in nickel ore prices in 2024, which also raised downstream NPI prices. Market participants told Argus that Indonesia could pursue a strategic reduction of ore licences (RKAB) in 2025 to support prices given weak demand-side fundamentals and the pressure on the government to preserve margins for domestic producers. French nickel mining group Eramet revised down its 2024 ore production guidance at PT Weda Bay Nickel to 29mn wmt in October from an initially expected 40mn-42mn wmt because of permit restrictions.

LME nickel is expected to find price support at the higher end of $15,000-16,000/t this year. A move above this range depends on further supply side cuts. Macquarie identified output cuts of 100,000-150,000t in Indonesia and 400,000t in the rest of the world over the past two years, driven by tight ore supply and falling Class 2 production in Indonesia and the inability of non-Indonesian suppliers to compete. A demand-side recovery in key consumption markets could also widen price bands for nickel on the higher end, as Nornickel projects nickel demand growth in the battery market to rise to 42,000t this year, up from 19,000t in 2024.

By Raghav Jain

LME Nickel three-month official price $/t

Nickel pig iron 10-14% cif China main port duty unpaid $/t

Argus NPI 10-14% cif China diff to LME Nickel $/t

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

News

02/05/25

Cliffs to idle 3 US steel mills this summer

Houston, 2 May (Argus) — Integrated steelmaker Cleveland-Cliffs will indefinitely idle its Conshohocken, Riverdale, and Steelton steel mills this summer in response to weak demand for the products produced at the mills. The idlings will impact about 950 workers spread across the 700,000 short ton (st)/yr Riverdale high-carbon coil mill in Illinois, the 500,000st/yr Conshohocken specialty plate mill in Pennsylvania and the 300,000st/yr Steelton, Pennsylvania railroad rail mill, a company spokesperson told Argus . Cliffs said the moves are temporary and will begin at the end of the required 60-day WARN notice periods in their respective states — on or about 30 June. By Marialuisa Rincon Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Find out more

News

US adds 177,000 jobs in April, jobless rate steady

02/05/25

News

02/05/25

US adds 177,000 jobs in April, jobless rate steady

Houston, 2 May (Argus) — The US added 177,000 jobs in April, topping expectations, even as the new US administration's campaign of tariffs against allies and trading partners heightened business and consumer uncertainty. Economists surveyed by Trading Economics had forecast job gains of 130,000 for April. The unemployment rate held steady at 4.2pc in April, the Bureau of Labor Statistics (BLS) reported. Job gains for March were revised lower by 43,000 to 185,000. The unexpectedly strong job report comes two days after the government reported the economy contracted at a 0.3pc annual rate in the first quarter, largely on a surge in imports as companies sought to build inventory ahead of the impacts of President Donald Trump's import tariffs. Consumer and business confidence have tumbled and economists have raised the odds of a US recession this year. US job gains averaged 152,000 in the 12 months prior to April. Federal government employment declined by 9,000 jobs in April and has fallen by 26,000 since January as mass federal layoffs take effect. Employees on paid leave or receiving severance pay are counted as employed, BLS said, so most of the announced federal job cuts do not yet show up in the data. Health care added 51,000 jobs in April, while transportation and warehousing added 29,000 jobs, more than double the average in the prior 12 months. Financial activities added 14,000 jobs. Construction added 11,000 jobs and manufacturing lost 1,000 jobs. Leisure and hospitality jobs grew by 24,000 and health care and social assistance added 78,000 jobs. Average hourly earnings rose by a 3.8pc annual rate, unchanged from the pace in March. By Bob Willis Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

South Australia closes Hydrogen Power SA office

02/05/25

News

02/05/25

South Australia closes Hydrogen Power SA office

Sydney, 2 May (Argus) — The state government of South Australia has rolled its Office of Hydrogen Power SA (OHPSA) into the Department of Energy and Mining (DEM), after scrapping plans for a 250MW electrolyser and 200MW hydrogen-fired power station. The OHPSA has been absorbed into the other state department, a spokesperson for SA energy minister Tom Koutsantonis said on 2 May. This comes after the state cut the A$593mn ($381mn) it had promised for its Hydrogen Jobs Plan in early 2025. The funds were reallocated to subsidise the 1.2mn t/yr Whyalla steelworks, which entered administration on 19 February . The associated Office of Northern Water Delivery, which was intended to support the green hydrogen sector in the state's upper Spencer Gulf region with new water pipeline supply, has also been incorporated within the DEM, Koutsantonis said on 1 May. SA's other major hydrogen hub planned at nearby Port Bonython was also overseen by the OHPSA. Development agreements with five companies have been signed for Port Bonython, including with London-based energy company Zero Petroleum for an e-SAF plant . SA is aiming to transition the ageing Whyalla steelworks to develop low emissions iron and steel products, but administrator KordaMentha is yet to finalise a buyer for Whyalla's controlling company OneSteel, which was formerly owned by UK-based GFG Alliance. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

Australia's Coalition eyes power, resource funding cuts

02/05/25

News

02/05/25

Australia's Coalition eyes power, resource funding cuts

Sydney, 2 May (Argus) — Australia's federal Coalition opposition has announced it will cut key energy rebates and resource sector subsidies, if elected on 3 May, to reduce forecast future budget deficits. The Peter Dutton-led opposition will cut programs, including the Labor government's A$20bn ($12.8bn) Rewiring the Nation transmission plan, and the A$15bn National Reconstruction Fund aimed at underwriting green manufacturing using domestic minerals. It will also unwind electric vehicle tax concessions to save A$3.2bn, and cancel planned production tax credits for critical minerals processing and green hydrogen estimated to cost A$14.7bn. Combined savings measures will improve the budget's position by A$13.9bn over the four years to 2028-29, the Coalition said on 1 May, cutting debt by A$40bn during the same timeframe. The announcement comes as opinion polls show Australia's next federal government is likely to force one of the two major parties into minority, after a campaign where cost-of-living relief promises have trumped economic reform policy. The centre-left Labor party is more likely than the conservative Coalition to form government at the 3 May poll. It holds a thin majority of just three seats in parliament's main chamber, the House of Representatives, meaning a swing against it would force it to deal with minor parties such as the Greens and independent groupings. Promising a stable government, as Australia emerged from Covid-19, Labor had benefited from a resources boom as Russia's invasion of Ukraine led LNG and coal receipts to skyrocket and China's emergence from lockdowns revitalised its demand for iron ore, which jointly form the nation's main commodity exports. But as markets adjust to a period of protectionist trade policy and predictions of a slowdown in global growth abound, economists have criticised the major parties' reluctance to embrace major reform on areas such as taxation, while continuing to spend at elevated levels post-pandemic. Australia's resource and energy commodity exports are forecast to fall to A$387bn in the fiscal year to 30 June 2025 from A$415bn in 2023–24. The Office of the Chief Economist is predicting further falls over the next five years, reaching A$343bn in 2029-30, lowering expected government revenue from company tax and royalties. Gas The Coalition has pledged a domestic reservation scheme for the east coast, forcing 50-100PJ (1.34bn-2.68bn m³/yr) into the grid by penalising spot LNG cargoes. Australia's upstream lobby has opposed this, but rapidly declining reserves offshore Victoria state mean gas may need to be imported to the nation's south, depending on the success of electrification efforts and an uncertain timeline for coal-fired power retirements. Labor has resisted such further gas interventions , but it is unclear how it will reverse a trend of rising gas prices and diminishing domestic supply, despite releasing a future gas plan last year. The party is promising 82pc renewables nationally by 2030, meaning it will have to nearly double the 2025 year-to-date figure of 42pc. This could require 15GW of gas-fired capacity by 2050 to firm the grid. On environmental policy, narrowing polls mean Labor's likely partners in government could be the anti-fossil fuel Greens and climate-focused independents — just some of the present crossbench of 16 out of a parliament of 151. The crossbench may drive a climate trigger requirement in any changes to environmental assessments, which could rule out new or brownfield coal and gas projects. Coal has been conspicuously absent from policy debates, but Labor has criticised the Coalition's nuclear energy policy as expensive and unproven, while the Coalition has said Labor's renewables-led grid would be unstable and costly because of new transmission requirements. The impact of the US tariff shock that dominated opening days of the month-long election campaign remains unclear. Unlike Canada, Australia is yet to be directly targeted by US president Trump's rhetoric on trade balances and barriers. But the global unease that has set in could assist Labor's prime minister Anthony Albanese, as he presents an image of continuity in an uncertain world economy. Australia's main exposure to Trump tariffs is via China, its largest trading partner and destination for about 35pc of exports, including metal concentrates, ores, coal and LNG. A downturn in the world's largest manufacturer would spell difficult times ahead for Australia, as it grapples with balancing its budget in a normalising commodity market. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

News

GM cuts guidance on up to $5bn tariff exposure

01/05/25

News

01/05/25

GM cuts guidance on up to $5bn tariff exposure

Houston, 1 May (Argus) — Automaker General Motors (GM) revised its 2025 guidance lower today to reflect $4bn-5bn of exposure to auto tariffs imposed by the Trump administration. Full-year 2025 profit guidance was lowered to a $8.2bn-10.1bn range, from the $11.2bn-12.5bn guidance given in the company's fourth quarter earnings call earlier this year. The new guidance takes into account clarifications to tariffs already imposed on automakers earlier this week. GM's tariff exposure includes $2bn of vehicles imported from South Korea and tariffs on autos imported from Mexico and Canada, as well as "indirect material imports." GM said it expects to offset 30pc of the exposure by producing an additional 50,000 full-size trucks/yr at its Fort Wayne, Indiana, plant and expanding battery module assembly in the US. GM will also work to ensure its supply chain is US-Mexico-Canada Agreement (USMCA) compliant and nearshore its production, executives said. More than 80pc of GM's supply chain is USMCA compliant, most of which is based in the US. US president Donald Trump on 29 April offered to offset a 25pc tariff on imported auto parts scheduled to be imposed on 3 May and to exempt auto parts from accumulating these and and other import tariffs. Trump imposed a 25pc tariff on imported cars on 3 April. GM on 29 April rescheduled its earnings call but released its first quarter earnings on schedule that day. The company reported sales of 693,000 vehicles in the US in the first quarter, up by 17pc from the prior-year quarter. Electric vehicle (EV) sales rose by 94pc to 32,000 units in the same period. Global sales rose by 7pc to 1.44mn vehicles in the first quarter compared to the first quarter of 2024. GM posted a $2.8bn profit in the first quarter, down by 7pc from a year earlier, which was partially attributed to higher costs. By Marialuisa Rincon Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more