Nickel
Table of Contents

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Summary

Nickel is a core cathode metal in high-energy lithium-ion chemistries (NMC and NCA). Indonesia produced about 2.6 million tonnes of the world’s roughly 3.9 million tonnes of mined nickel in 2025, about two-thirds of the total, and Indonesian policy now sets the price direction. The primary nickel market has been in surplus since 2022, but in 2026 Indonesia cut its ore quota (RKAB) and a global sulfur shortage pushed up the cost of HPAL battery-grade production. LFP, which uses no nickel, supplies almost half of the global electric car market, and most solid-state and lithium-sulfur programs in this research area reduce or avoid nickel.

Key Facts

  • Chemical formula: Ni (atomic number 28)
  • Primary battery uses: Cathode active material in NMC and NCA; not used in LFP, Li-S, or the TiO₂-based Donut Lab design
  • World mine production: about 3.71 million t (2024) and 3.9 million t (2025e), up about 5% (USGS MCS 2026)
  • By country (2025e): Indonesia 2.6 Mt (about 67% by USGS figures), Philippines 270 kt (down about 24%), Russia 200 kt, Canada 140 kt, New Caledonia 140 kt, China 120 kt, Australia 45 kt (down about 54% after mine suspensions at low prices) (USGS MCS 2026)
  • Market balance: primary surplus of about 182 kt in 2024 and 189 kt in the first nine months of 2025 (USGS MCS 2026)
  • Price: LME cash averaged $16,812/t in 2024 and an estimated $15,000/t in 2025 (USGS MCS 2026); S&P Global’s June 2026 forecast put the 2026 average LME 3M price at $18,245/t (S&P Global via Hellenic Shipping News)
  • Indonesia 2026 ore quota (RKAB): 260–270 million wet tonnes versus 379 million approved for 2025 (Benchmark); smelter needs are estimated at 300–310 million tonnes (S&P Global via Hellenic Shipping News)
  • LFP share: supplies almost half of the global electric car market, up from under 10% in 2020 (IEA)
  • Battery-grade nickel: Class I nickel (high purity) differs from Class II/intermediates; Indonesian output is mostly NPI and intermediates (MHP) that need conversion
  • Chinese role in Indonesia: Chinese stakeholders control more than 75% of Indonesia’s nickel refining capacity (about 8 million t in 2023, 19 refineries covering over 90% of capacity; a beneficial-ownership measure of capacity, not output) (C4ADS, Feb 2025)

Major Producers / Processors

Company Country Position Notes
Indonesian producers and Chinese JVs Indonesia / China 🇨🇳 Mining, NPI and HPAL processing Dominant in laterite conversion; HPAL operators include Zhejiang Huayou Cobalt 🇨🇳, which cut MHP output 50% from 1 May 2026 on sulfur costs
Vale (NYSE: VALE) Brazil Mining (Canada, Indonesia, Brazil) Class I nickel producer; PT Vale and Huayou are considering sulfur recovery from tailings at the Pomalaa HPAL project
Nornickel Russia Mining and refining Russia produced about 200 kt in 2025e; sanctions risk for Western buyers
Eramet France Mining Weda Bay Nickel (Indonesia) partially entered care and maintenance after its quota was cut
BHP (ASX: BHP) Australia Mining Australian output fell about 54% in 2025e as mines went into care and maintenance

Supply Chain Position

Nickel flows into the battery supply chain at the Precursor Chemicals → Cathode Active Materials layer: mined nickel or HPAL intermediates are converted to mixed hydroxide precipitate (MHP), then to NMC precursor (pCAM), then to cathode active material. HPAL consumes roughly 10 tonnes of sulfur per tonne of nickel, so sulfur prices feed directly into battery-grade nickel cost; see Sulfur.

Why nickel reduction matters for documented companies:

  • Lyten (Li-S chemistry): zero nickel.
  • Factorial Energy: FEST® cells can use high-nickel NMC; the POSCO Future M partnership explores Ultra Hi-Ni single-crystal cathodes.
  • Adden Energy, QuantumScape, Solid Power, ProLogium: lithium metal anodes allow flexibility in cathode chemistry; commercial-scale cathode specifics are not fully disclosed.
  • Idemitsu Kosan: supplies electrolyte; cathode nickel content is Toyota’s design choice.
  • Donut Lab: TiO₂-based design with no nickel in the cathode (company description).

Notable Developments

  • 2026-07: S&P Global reports Weda Bay halted since May after exhausting its initial quota, with quota revision applications due 31 July. Granular sulfur CFR Indonesia was $1,050/t on 9 July, and HPAL margins were near zero or negative for much of Q2. (S&P Global via Hellenic Shipping News)
  • 2026-05: Reports that Indonesia was considering raising the 2026 RKAB to about 360 million tonnes capped the nickel rally (up about 17% from January to early May); the government had not confirmed the proposal. (Hellenic Shipping News)
  • 2026-02: Indonesia announced a 2026 RKAB of 260–270 million wmt, down from 379 million wmt approved for 2025. (Benchmark)
  • 2025: Indonesian output rose about 13% as new operations ramped up, while Australian and Philippine output fell. (USGS MCS 2026)

Geopolitical Risk Assessment

Concentration risk has shifted from Russia to Indonesia. Indonesia supplies more than 60% of mined nickel and sets annual ore quotas, approval cycles and ore pricing formulas, so policy can move the market quickly; the quota cut in early 2026 and the later reports of a possible increase both moved prices. Combined with Chinese control of more than 75% of Indonesia’s refining capacity (C4ADS), the effective dependency on China for battery-grade nickel is comparable to cobalt.

The 2026 price picture is two-sided: quota restrictions and sulfur-driven HPAL cost increases support prices, while inventories on the LME and SHFE reached multi-year highs and the INSG forecast only a 32,000 t primary deficit for 2026 (Hellenic Shipping News). The shift to LFP and nickel-free advanced chemistries is a supply-security response as much as a cost response.

Sources

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