TRADE REVIEW: Global nickel market eyes oversupply in Q4 as shifting trade policy feeds uncertainty

This report is part of the S&P Global Energy Metals Trade Review series, where we dig through datasets and digest some of the key trends in iron ore, metallurgical coal, copper, alumina, cobalt, lithium, nickel and steel and scrap. We also explore what the next few months could bring, from supply and demand shifts to new arbitrages, and to quality spread fluctuations.

The global nickel market is likely to remain under pressure in the final quarter due to ample supplies, as demand from major nickel-consuming sectors, including stainless steel and batteries, remains slow amid lingering tariff uncertainties.

"The recent US interest rate cut has offered some temporary support to nickel prices, but the global nickel market oversupply continues to keep a lid on prices," according to a report by S&P Global Energy. "Potential additional rate cuts and uncertainties surrounding global tariff policies may lead to short-term price volatility."

Prices for nickel sulfate, a key component in nickel-manganese-cobalt (NMC) battery production, rose in the third quarter amid slight demand improvement and supply constraints as refiners scaled down production due to higher feedstock prices.

Platts nickel sulfate price peaked this year at Yuan 28,150/mt ($3,956/mt) DDP China on Sept. 26, from its lowest level of Yuan 25,200/mt ($3,506) DDP China on Jan. 2, Energy data showed.

The One Big Beautiful Bill Act, introduced by US President Trump on July 4, ended tax credits for electric vehicle (EV) purchases after Sept. 30, resulting in front-loading and, thus, a temporary rise in demand for nickel sulfate from battery precursor manufacturers.

Chinese domestic demand is beginning to improve, approaching the traditional September-October peak period, but nickel sulfate prices are likely to remain weak due to underutilized mixed hydroxide precipitate (MHP)-to-sulfate capacity, according to market participants.

Platts assessed spot battery-grade nickel sulfate with a minimum 22% nickel content and maximum 100 ppb magnetic material at Yuan 28,300/mt ($3,986/mt) DDP China Oct. 13, up 9.5% since the start of Q3.

Ongoing MHP spot tightness

Upstream, spot availability for MHP, the feedstock for nickel sulfate, tightened amid temporary supply disruptions in Q2 and cobalt feedstock tightness following the DRC's cobalt export ban ending Oct. 16 that drove demand for nickel and cobalt-containing MHP. The DRC's cobalt export ban is to be succeeded by an export quota of 18,125 mt for the remainder of 2025, which is likely to only arrive late December at the earliest.

Chinese MHP imports rose 39.9% year over year to 170,638 mt in August, the customs data showed. However, supply tightness is likely to persist throughout Q4, supporting MHP payables.

"There's no MHP stock; consumers will need to purchase at a premium if they require it," said a Northeast China-based producer, adding that while numerous projects are underway for nickel sulfate and metal, there has been less focus on MHP.

Platts assessed the MHP CIF North Asia basis LME nickel price at 88.3% payables Oct. 13, up 4.1% since July 1.

The all-in price, as calculated from the payable basis LME nickel price, was at $13,331/mt, up $624/mt since the start of Q3.

NMC battery market share shrinks

China's EV market reached a year-to-date sales peak in August, rising 10.5% month over month to 1.4 million units, according to the China Association of Automobile Manufacturers.

Despite the higher August EV sales in China, the NMC battery market share continued to shrink in 2025 amid shifting battery preference towards lithium-iron-phosphate (LFP) batteries.

At 30.9 GWh, NMC batteries held a 22% market share, two percentage points lower than a year ago, against LFP, which commanded the remaining 78% of the market, according to China Automotive Battery Innovation Alliance data.

NPI prices rise on improved sentiments

In addition to the peak season in China, which temporarily lifted stainless steel demand, supporting nickel pig iron (NPI), prices also drew support from positive market sentiments led by Indonesia's move to shorten its nickel RKAB mining quotas, to one year from three years to limit oversupply.

China's anti-involution campaign, which aims to raise industrial product prices, including steel prices, through supply-side adjustments, also helped boost sentiments, lifting NPI prices, a key raw material for stainless steel.

Platts assessed daily spot NPI with 10% nickel content at $117/mtu FOB Indonesia Oct. 13, up 5.5% since the start of Q3.

However, these government initiatives to support prices are unlikely to alter the nickel industry's underlying sluggishness.

Nickel ore prices weaken on ample inventory

Prices for nickel ore, the raw material for NPI, softened in Q3 and are expected to remain weak through Q4. Narrowing NPI smelter margins continue to dampen Chinese buying interest, pressuring nickel ore prices.

Additionally, rising imports into China have led to increased inventory levels, weighing on nickel ore prices. China imported 6.347 million mt of nickel ore in August 2025, up 29.9% from a year ago, showed customs data.

Low-grade nickel ore prices fell 6.6% in Q3 to the lowest level of $42/wmt Sept. 17, while high-grade nickel ore prices fell 4.5% to the lowest level of $64/wmt Sept. 17, according to Platts data.

Platts assessed low-grade nickel ore with 1.3% nickel content at $42.5/wmt CIF China and high-grade nickel ore with 1.6% nickel content at $63.9/wmt CIF China Oct. 14, down 5.6% and 4.6%, respectively, from the start of Q3.

Eyes on market developments

US tariffs on Chinese-imported materials continue to weigh on the batteries and stainless-steel markets. The US and China have extended a temporary truce on tariff policies for an additional 90 days, from Aug. 12 until Nov. 10.

The Indonesian government has been cracking down on illegal mining. It recently seized around 148 hectares in Weda Bay and 172.8 hectares owned by PT Tonia Mitra Sejahtera. This comes after the government revoked licenses of four nickel miners in Papua's Raja Ampat on June 10.

In China, detailed policies under the "anti-involution" campaign will be announced this October. The market is expecting stimulus policies that would help support the steel market.

Amid shifting trade policies, regulatory crackdowns, and pending stimulus measures, the nickel market remains clouded by uncertainty and is likely to observe heightened volatility in the final quarter.