Critical Minerals and Energy Intelligence

Indonesia Nickel Production to Rise; Outpace Demand

As reported by Reuters, according to materials research at CICC, Indonesia is on track to quadruple nickel capacity by 2025, reaching a total of 1.2 million tonnes. Based on those figures, CRU Group’s Ellie Wang, based in Shanghai, is forecasting a 7.5% price dip this year, bringing the price of nickel to about $23,741 a tonne, with a further possible fall next year.

Now, this isn’t all battery-grade material. Indonesia produces nickel pig iron (NPI), nickel matte, and Mixed Hydroxide Precipitate (MHP), the last of which can be processed into nickel sulphate used in EV batteries. The bulk of their production is in the low-grade material – mostly used for stainless steel but however you cut it, they are going to produce a large quantity. Elsewhere, refined nickel output is expected to climb as well, with the Shanghai Metals Market forecasting a jump from 83,400 tonnes in 2022 to almost 100,000 tonnes by 2025.

It’s important to note that demand is not expected to remain static during this time – far from it in fact. Stainless steel demand is expected to climb to 2.4 million tonnes by 2025 and EVs, according to CICC, should cause battery-related demand to more than double from 342,000 tonnes in 2022 to 868,000 tonnes by 2025.

As a nickel bull, I love seeing robust growth in demand but it’s true that we are also going to see a great deal of new supply hitting the market too.

Anthony Milewski

Chairman, Nickel 28 Capital

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