The nickel supply chain is becoming tighter in view of growing strategic demand
The global nickel market is undergoing a fundamental shift, offering attractive investment opportunities as supply constraints tighten and governments recognise the strategic importance of the metal beyond its use in electric vehicles. Current market dynamics suggest that investors should consider exposure to this important commodity as geopolitical factors and Indonesian market control reshape the industry landscape. Indonesia has become the dominant force in global nickel supply, with the metal now the country's largest export sector. The government has demonstrated both the ability and willingness to influence prices through sophisticated mechanisms, including environmental protection measures and RKAB licence quotas. Recent measures illustrate this control: Indonesia has halted production at four projects in Raja Ampat, affecting 1-2% of global supply. Although nickel prices remain in the US$15,000 to US$15,800 range, ore prices have reached a two-year high. This has led to pressure on margins, forcing even industry leader Tsingshan to cut production. Weaknesses in the supply chain are becoming increasingly apparent along the entire value chain. Ore imports from the Philippines are well above the previous year's level, preventing the typical stockpiling before the rainy season. The deterioration in quality in medium and high-grade deposits is impairing the efficiency of nickel pig iron production, while weather disruptions in key Indonesian regions are creating additional pressure points. Industry experts are forecasting prices of USD 16,500 by late summer, with a potential of USD 18,000 to 20,000 per tonne by the end of the year.
The strategic importance of nickel has gone beyond electric vehicles to become a national security priority. Recent US negotiations with China over access to rare earths highlight the West's dependence on Chinese-controlled supply chains and increase government support for domestic alternatives. Canada has prioritised nickel projects and supported them with $500 million in funding for critical minerals processing
-------------------------------------------------------------------------------------------------------------------------------------------------- at some point even the biggest idiot realises that you can't eat nickel.....
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