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Nickel is a chemical element and a transition metal. It is mostly used for high-grade steel manufacturing, and increasingly so, in batteries. Owing to its corrosion resistance, durability, and abundance in availability, stainless steel is used in various sectors, including food and beverage, construction, aerospace, transport, medical, chemical, etc. The major countries in nickel mining include Indonesia, Philippines, Russia, and New Caledonia. Indonesia is also the country with the largest reserves of nickel, followed by Australia and Brazil. Interestingly, nickel reserves are among the metals and minerals with the least remaining life years, however, because nickel is a highly recyclable material, this poses less of a problem.

In March, nickel futures reached their highest level in five months, over $16,500 a tonne, after plunging to nearly four-year lows earlier this year due to Indonesia's efforts to reduce oversupply. The Indonesian government contemplated cutting its nickel mining limits by 120 million tons in 2025, which would result in a 35% decrease in the world's current supply. However, the unwillingness of buyers to start a recovery suggested that nickel might still be oversupplied, since inventories at LME warehouses were still more than double what they were a year earlier, at around 200 thousand tons. This is because, when Indonesia banned the export of nickel ores in 2020, a large number of Chinese smelting projects were established there. As of September, Indonesia has 44 nickel smelting enterprises, up from four a decade earlier. Meanwhile, both Chinese PMIs showed an increase in manufacturing demand in February, which increased speculation that manufacturing would rebound this year.

In the medium term, the growth of the nickel market can be driven by the increasing demand for nickel in stainless steel alloys. Today, about two-thirds of the nickel sold annually is used for stainless steel. In addition, growing demand for nickel in automotive batteries, energy storage systems in wind turbines or lower cost solar panels is a key driver of market growth. Asia-Pacific accounts for a large share of nickel consumption. This is mainly due to the presence of large stainless steel companies and battery manufacturers. Additionally, increased nickel consumption in Electric Vehicles (EVs) is also expected to boost the market in the region, as it accounts for a significant portion of nickel demand.