A demand overview of the global nickel and stainless steel supply

Global nickel supply-demand overview: The global primary supply and demand for nickel grew at similar rates of 6.6 per cent and 6.7 per cent PA from 2016 to 2021 creating a persistent shortage. However, starting 2022 the global primary nickel supply shifted to a surplus with an anticipated supply growth of 8 per cent CAGR surpassing demand growth of 7.1 per cent CAGR from 2022 to 2027. The growth in supply is accredited to refined nickel, NPI, and nickel sulphate sectors, while demand is driven by stainless steel, batteries and alloys.

Nickel market demand trends: Stainless steel remains the largest consumer of nickel although the demand share has dropped from 75 per cent in 2016 to 67 per cent at present. The share of demand for batteries has increased from 2 per cent in 2016 to a projected 13.4 per cent by 2027, driven mostly by the expansion in electric vehicle market. The stainless-steel demand is expected to grow from 3.9 per cent between 2016-2021 to 6.2 per cent between 2022-2027, while the battery sector growth, is expected to remain consistent at 6.9 per cent annually.

Regional variation in stainless-steel production: China’s share in stainless steel production is projected to grow from 67 per cent in 2022 to 74 per cent by 2027 with manufacturers relying heavily on Nickel Pig Iron (NPI). Indonesia also uses NPI due to abundant resources and cost-effective production for its stainless-steel manufacturing.

Indonesian nickel industry: Indonesia holds the largest share of global nickel resources at 43 per cent and is anticipated to supply over 85 per cent of global nickel intermediaries by 2027. The production of nickel intermediates (MHP and high-nickel matte) is projected to increase substantially, with MHP supply coming mostly from self-owned mines. High-nickel matte production is growing to meet demand for pure nickel and nickel sulphate, with a preference for external ore sourcing.

Indonesian stainless steel industry growth: Indonesia is the world’s second-largest stainless-steel producer, with focus on exporting #300 series stainless-steel to China in 2023, the exports amounted to 42 per cent of total production. Their production capacity is expected to exceed 7 million metric tonnes by 2027, driven by competitive costs and resource abundance.

In conclusion, Indonesia’s nickel and stainless-steel industries are looking at continued growth, with significant indications for global supply dynamics and market trends.