How to lose the nickel game in one easy step

Back in 2022, nickel prices surged to as much as $100,000 per tonne, driven by fears of supply disruption in Russia. The LME even had to suspend trade for a while after prices jumped from around $80,000 to over $101,000 per tonne.

Two years later, nickel has basically crashed and Indonesia and China are cutting production to stop the slide, which has seen prices reach $16,000 per tonne.

Leaving aside uncomfortable questions as to some of the reasons for such a massive price decline (hint: they have to do with EV sales), it seems that the supply situation is pretty good. But is it really, as the author of a second-rate opinion piece would ask. The anti-climactic answer, of course, is “Not for long, probably.”

Last year, prices fell amid record-high EV sales and did I mention that EV sales last year reached a record? They did, to much fanfare. But nickel prices fell because production rose – notably in Indonesia. In fact, the country that is home to the largest nickel resources in the world accounted for over half of global output. Fun fact: that’s up from about 30% of global supply back in 2020, per Reuters.

You might remember Indonesia as the country that first forced international miners to start building nickel refineries there instead of shipping out the raw metal to process at home and then started talking about a nickel version of OPEC to protect its key industry.

Okay, so that same Indonesia has clearly been working on boosting its output so considerably that, per one French mining CEO, it could devastate the competition in a few short years.

So what does the competition do, you might ask. Why, it had the brilliant idea of ostracising Indonesian nickel as — take a seat — dirty. When, let me repeat that because I like the taste of absurdity on my brain, Indonesia produces more than half of the world’s nickel total.