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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.

As output cuts from Indonesia were unable to overcome the perception of an oversupplied market, nickel futures dropped under the $15,000 per tonne mark, the lowest in six weeks, and remained close to the over-four-year low of $14,150 in April. Nickel mining permits were lowered by the Indonesian government this year from 120 million tons to 150 million tons, resulting in a 35% reduction in global supply compared to present levels. This was brought on by an increase in Chinese smelting projects in Indonesia following the country's 2020 ban on the export of nickel ores. As of September, there were 44 nickel smelting enterprises in Indonesia, up from four ten years earlier. Consistently, nickel warrants available at LME warehouses rose by 30,000 tonnes since the start of the year to 180,230 at the end of May. In the meantime, lingering skepticism over whether the White House will be refrain from tariffing trading partners in July also pressured base metals.

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.