On March 3, Ontario Premier Doug Ford warned that if the U.S. imposes new tariffs, Ontario will cut back on electricity exports to U.S. border states and stop shipping nickel.
However, as a provincial entity, Ontario cannot unilaterally halt nickel exports without federal approval, as international trade policy is typically governed at the national level. While Canadian Prime Minister Justin Trudeau has previously suggested the possibility of an energy export ban against the U.S., he has yet to explicitly support Ontario's proposed measures.
Canada's nickel production is primarily driven by two companies. Vale S.A., the world's second-largest refined nickel producer, operates major facilities in Canada and the UK. While its full capacity reaches 180,000 tonnes per year, production has declined significantly in recent years, with only 79,500 tonnes produced in 2024. Its raw materials come from three major Canadian mining sites -- Sudbury, Thompson, and Voisey's Bay -- before being processed at refineries in Canada and the UK. Nickel pellets produced at the Copper Cliff smelter in Canada and the Clydach refinery in the UK are both LME deliverable.
Sherritt International, on the other hand, operates a refinery in Fort Saskatchewan that primarily processes feedstock from Cuba's Moa, producing around 30,000 tonnes of nickel annually. Due to its reliance on Cuban raw materials, Sherritt's nickel briquette are not permitted for entry into the U.S. market.
Source: Vale S.A., Mysteel
According to U.S. Customs and Border Protection (CPB) and Canada Border Services Agency (CBSA), nearly half of U.S. nickel imports come from Canada, while 40-50% of Canada's nickel exports are destined for the U.S. over the past three years. The U.S. is Canada's primary nickel market, and finding alternative buyers in the short term would be challenging.
Source: CBP, CBSA, Mysteel
Canada primarily exports nickel pellets, briquettes, and rondelles, whereas China and Indonesia mainly produce nickel plates. While some downstream manufacturers have flexible requirements for nickel forms, and China is expanding its refined nickel production in multiple forms, the current supply surplus means that if Canada cuts off nickel exports to the U.S. for an extended period, the U.S. will inevitably seek alternative sources in the long term.
It is worth noting that Ontario's nickel sector is a vital part of the province's economy, and halting exports would pose a significant challenge to local mining revenues and employment. Premier Doug Ford's recent threat to stop nickel shipments if the U.S. imposes tariffs is widely viewed as a bargaining chip aimed at forcing concessions from Washington. This strategy echoes past Canadian federal countermeasures, such as energy bans, that secured trade compromises with the U.S. and may signal a similar approach in the ongoing tariff dispute.
Written by Cora Ji, jiruyan@mysteel.com
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