Nickel prices struggle to return to previous highs amid international tariff issues in April

In April, the postponement of tariff issues somewhat eased market pessimism. Coupled with a valuation recovery following the previous sharp decline in nickel prices, nickel prices rebounded to some extent. However, overall, macroeconomic pressures and the persistent oversupply in the nickel market continue to weigh on sentiment, making it difficult for nickel prices to recover to previous highs in the short term.

 

In the second quarter, nickel fundamentals are expected to find some support from the adjustment of Indonesia's nickel pricing system, the implementation of new tax policies, and tighter nickel ore circulation amid Ramadan and the rainy season. Nevertheless, the international trade environment is likely to dampen downstream consumption expectations, and overall, nickel prices are expected to continue a weak and volatile trend.

 

For ternary precursor materials, the industry is currently facing an overall loss-making situation, which continues to put pressure on nickel sulfate margins. Both MHP and high-grade nickel matte premiums have recently risen. MHP spot supply has tightened due to production cuts in Indonesia, leading to higher offer prices. However, actual transactions remain limited as nickel salt plants show weak purchasing willingness. Although changes in Indonesian nickel mining policies and disruptions from the rainy season in the Philippines have pushed up production costs, sluggish downstream demand is capping the upside in prices. 

 

According to Mysteel data, China's ternary precursor production in March 2025 reached 73,500 tonnes, up 18.17% month-on-month and 20.29% year-on-year. The sharp rise in cobalt prices in March led to a wave of early order placements from battery cell manufacturers, driving a notable increase in precursor production. However, production cuts are expected in April as companies face mounting inventory pressures. Looking ahead to the second quarter, there may be a slight improvement driven by inventory destocking expectations in the battery sector.

 

 

For refined nickel, China's total refined nickel production in 2024 is estimated at 331,500 tonnes, up 35.31% YoY. Entering 2025, although the overall surplus expectation has narrowed somewhat, persistently low nickel prices have continued to weigh on profit margins for refined nickel, leading to potential delays or cancellations of some projects originally planned for commissioning in 2025. Nevertheless, certain enterprises, driven by considerations such as industrial chain integration and strategic positioning, are still moving forward with capacity expansion or new production projects. As a result, China's refined nickel production for the full year of 2025 is projected to reach 454,800 tonnes, up 37.19% year-on-year.

 

According to Mysteel survey of 21 key producers, China's refined nickel production in March 2025 reached 36,665 tonnes, a 10.61% month-on-month gain and a 50.19% year-on-year increase. Cumulative production in Q1 2025 totaled 103,389 tonnes, up 44.46% year-on-year.

In addition, 2024 saw a significant decline in FeNi supply from several Asian regions, including Myanmar. Production suspensions occurred in the Dominican Republic due to sustained losses, while in New Caledonia, one producer halted operations and another continued to operate at a loss. Entering 2025, with overseas stainless steel demand showing signs of recovery, FeNi prices have risen notably, supporting a rebound in production.

 

In March 2025, Indonesia's nickel pig iron (NPI) production reached 152,300 tonnes in Ni. content, up 13.57% month-on-month and 24.84% year-on-year. Total NPI production for January to March stood at 433,900 tonnes in Ni. content, marking an 18.91% year-on-year increase.