Nickel prices recently experienced a significant rebound, driven by strong commodity prices boosted by a weaker U.S. dollar and growing concerns over nickel ore supply in the Philippines.
During the 2025 Chinese New Year (CNY) holiday, the news of the U.S. imposing a 10% tariff on China created a major impact on both futures and spot markets, which has already been priced in by the market players.
While the Federal Reserve's decision to maintain interest rates aligned with market expectations, an unexpected decline in the ISM services PMI sparked volatility over the Fed's future policy direction. At the same time, a weaker U.S. dollar boosted commodity prices denominated in dollars, contributing to the overall market sentiment recovery.
On February 3, 2025, the Philippine Senate approved a bill that proposed to ban the export of raw mineral ores. This move aims to promote local industrial development, enhance the production of high-value export products, and create more jobs for Filipinos. Philippine Senate President Francis "Chiz" G. Escudero proposed provisions to amend Senate Bill No. 2826, which plans to ban the export of raw materials and would take effect in five years if signed into law.
On the supply side, China's refined nickel production in January 2025 reached 33,577 tonnes, down 3.39% MoM but up 47.73%.
Source: Mysteel
Refined nickel production in China is expected to continue expanding in 2025, driven by capacity growth from companies like Jinchuan Group, Huayou Cobalt, and others. In February 2025, China's refined nickel production is estimated at 34,957 tonnes, rising 4.11% MoM and 43.1% YoY.
However, recent reports from Indonesia and the Philippines on the supply side have raised market concerns. Before the CNY holiday, the Indonesia Nickel Miners Association (APNI) revealed that the government would approve a 2025 nickel RKAB totaling 298.49 million tonnes. However, Energy and Mineral Resources Minister Bahlil Lahadalia emphasized that while there are no plans to cut production this year, the ministry aims to balance RKAB demand with industrial capacity. The minister expects actual nickel production in 2025 to reach only 220 million tonnes, well below the approved figure, which has raised concerns about the country's real supply capability.
The Philippine Senate's recent approval of a raw ore export ban has been a key driver behind rising nickel prices. However, experts note that, given the country's limited industrial infrastructure, the Philippines is unlikely to achieve rapid industrial upgrades similar to Indonesia. Moreover, even if the legislation is fully enacted, it won't take effect for another five years, and its impact is expected to be more about boosting market sentiment than causing immediate supply disruptions.
The demand side remained stable overall, but the room for subsequent growth was limited, and many companies tended to buy on dips. The alloy sector continues to be the largest consumer, with strong performance in the military and shipbuilding industries. From January to December 2024, China's alloy industry consumed 204,200 tonnes of nickel, down 0.45% year-on-year.
Source: Mysteel
In the new energy sector, nickel sulfate prices remained strong before the Chinese New Year, reaching around Yuan 26,000/tonne, driven by supply-demand dynamics. Meanwhile, ternary material production is expected to decline in January due to both the holiday and weak purchasing interest from manufacturers. Orders for ternary materials are primarily long-term contracts.
Written by Cora Ji, jiruyan@mysteel.com
Edited by Aggie Hu, huchenying@mysteel.com
