There is no applause

Supply meets below-average demand
The physical nickel market continues to be well supplied. However, prices, including for nickel pig iron (NPI) from Indonesia, are at such a low level that both traditional manufacturers and producers of NPI are finding it difficult to make money (see also below). Therefore, nickel companies are thinking about how to reduce supply in order to achieve cost-covering prices. Although demand from the stainless steel production sector has recovered, it has still not returned to normal levels. Battery production continues to remain below expectations. Although prices remain well supported, there is currently a lack of imagination (and also clear data) for major price jumps.

On the global political stage, there is also currently one country in particular that is doing everything it can to continue to maximize economic uncertainty. There are new developments every day and even the red lines of the existing rule of law seem to be suspended. What actually must not be forgotten, however, is that there are not only those who act, but also those who apparently tolerate these actions, if not perhaps even secretly approve of them.

Taking the current 100-day average of the 3-month LME nickel price, it stands at USD 15,652.00/mt. Looking at the chart, it can be seen that it has been almost horizontal since mid-March with a slight downward movement, which corresponds to a fall in the average price of USD 133.00/mt. The curve progression, therefore, also corresponds in terms of price to the situation described above. This does not change the fact that there were repeated upward and downward swings during this timeframe.

This volatility was mostly caused by statements and also retractions or watering down of statements by the Trump administration. The world really does seem to be like a rabbit caught in a car’s headlights, although there really are a lot of headlights at the moment, at least in the perceived subjective perception. In the last one hundred days, the high for nickel on the London Metal Exchange was USD 16,780.00/mt (14th March 2025). The relative low was traded at USD 13,865.00/mt just a little after ‘Liberation Day’ on 7th April 2025.

At the time of the editorial deadline of this publication, the LME price for nickel (3-month future) was at USD 15,150.00/mt after Israel had launched an attack on Iran’s nuclear facilities and Iran in turn had announced retaliation.

AI makes fact-checking difficult
The power over the media and the associated sovereignty of interpretation seems to play an even more important role today than ever before. This is especially so when the images of the last few weeks and months are reviewed. Regardless of whatever one’s own opinion is, there should be a consensus amongst everyone who cares about a democratic system that – against the background of the possibilities of artificial intelligence (AI) – it is crucial that any kind of distributed content generated with AI is also subject to compulsory labelling.

This could take the form of digital watermarks (which can be made visible if desired) or directly visible labelling from the beginning. It is already very difficult to get a reasonably objective ‘picture’ of many things, but with the increasing use of AI, it will be almost impossible to tell the difference between fact and fake. Without this distinction, it will also be critical for the survival of democracy, because it not only depends on a broad economic prosperity but above all also on informed citizens.

At present, however, it is rather frightening to have the impression that many dystopias and conspiracy theories are being realised, if the relevant information is true. The existing and deliberately created disorientation can easily be used by interested parties to frighten, mobilise and ‘lead’ the masses. Unfortunately, not always in the right direction, whatever ‘right’ is and who legitimately defines it.

The German constitution, for example, and the constitutions of many other countries could provide such a set of values for judgement. Therefore, most democratic systems justifiably have high hurdles and requirements before things can be changed. This should definitely remain the case.

Tsingshan cuts production
According to the Bloomberg news service, Tsingshan is reducing part of its stainless steel production in Indonesia as excess capacity and sluggish demand continue to be a strain on prices. The whole sector is currently under pressure from smaller margins and the news could relieve the burden given Tsingshan’s dominant position as the world’s largest stainless steel producer.

Although the extent of the cuts remains unclear, Shanghai Metals Market (SMM) also reports about further, albeit modest, production cuts in China. From a wider perspective, these reductions seem to be in accordance with Beijing’s efforts to fine-tune industrial capacity with demand as part of its economic modernisation efforts.

Stainless steel producers outside Indonesia and China were probably pleased with the news, as Chinese and Indonesian products have also been exported to Europe and other (Asian) markets in the past. Although this development began long before President Trump took office again in the White House, the current trade policy (with 50% tariffs on steel and aluminium now announced) and economic uncertainty support this trend.

As a result, hurdles are increased for exports to the US market, and a continuing below-average Chinese domestic market for stainless steel will result in more material being diverted to other regions. Imports of some stainless steel products to Europe have already increased significantly compared to the previous year.

It would, however, be very surprising if the EU Commission did not once again adjust the safeguard measures, which had already been tightened in March 2025 and extended until 30 June 2026, in view of the latest developments and trade statistics. It is still legitimate to protect the European steel industry from dumping imports. Therefore, the demands of the European steel producers’ association EUROFER can only be endorsed, for the EU Commission to quickly act on its promise to introduce additional, highly effective trade measures soon to prevent a further increase in the import share of steel, as was also promised in the Steel and Metals Action Plan.

On the demand side, speculation about strong fiscal and monetary incentives, especially in China, in European countries and the USA, has fed the optimism for a recovery in demand for stainless steel, but this has been repeatedly disappointing. Unfortunately, because of macroeconomic and geopolitical uncertainties, the links in the entire value chain seem to be continuing to take a more hesitant position until the environment is less unpredictable. This would speak for a continued weaker price environment. Unless, of course, in the negotiations with the USA more stable results could soon be achieved. The ifo Institute fortunately recently raised its growth forecast for Germany, the largest economy in the EU, from 0.8% to 1.5% for 2026.

Transparent commodity markets: LME brings sustainability to pricing
The London Metal Exchange has started a new project which could sustainably change metal trading: In future, metals which are proven to be produced in a more environmentally friendly way should receive their own “sustainability premium”. The Exchange is currently discussing with market participants the introduction of such price premiums for four central metals – aluminium, copper, nickel and zinc – with the goal of replicating sustainable production standards also in the price.

Central here is the idea of making the value of sustainability in raw material products on the exchange visible and tradable. The publication of a sustainability premium should increase transparency and create an incentive for producers to keep to strict ecological and social standards. CEO Matthew Chamberlain emphasises that the market is developing increasingly differentiated sustainability criteria and certification programmes, which the LME wants to expand with a credible pricing system.

A key instrument in this regard is the Metalshub platform, with which the LME has been cooperating since 2024. Since last year a pricing mechanism for low-carbon nickel has been tested via Metalshub. Producers have to fulfil certain threshold values which are based on methods developed by the Nickel Institute. This procedure should now be extended to additional metals.

The project is supported by the system LMEpassport, via which companies submit the relevant proof of sustainability. Only brands that are proven to fulfil strict criteria should be granted access to the sustainability surcharge in the future. In order to make pricing transparent, the LME is also planning an independent price regulator which will analyse data from trading activities and publish official price premiums.

The sector representatives welcome the initiative: sustainable metals would finally be valued fairly and investments in a more climate friendly industry would be encouraged. The LME wants to have a dialogue with the market about the next steps and have announced further updates in the near future. By taking this step, the LME has made an important move in the direction of green industrial metals and could set an international standard for sustainability in commodity trading.

What is, however, surprising in this connection, is that stainless steel scrap and also steel scrap in general, as the most sustainable commodities in steel production, have more or less been left out of these considerations. Relevant studies conducted by the Fraunhofer Institute IMWS/IMW on behalf of the industry association, the Federal Association of German Steel Recycling and Waste Disposal Companies (BDSV) with the simple but clear titles ‘Scrap Bonus’ (https://www.bdsv.org/unser-service/publikationen/studie-schrottbonus/) and ‘Scrap Bonus Concrete’ ( https://www.bdsv.org/unser-service/publikationen/studie-schrottbonus-konkret/ ) could actually attract a great deal of attention. Unfortunately, however, they have not yet had the effect of internalising the sustainability of steel scrap into the price mechanism, as the LME and Metalshub are striving to do for particularly sustainably produced primary raw materials for good reasons.
The Carbon Border Adjustment Mechanism (CBAM) could become an important building block for further economic incentives in the use of steel scrap and sustainable primary raw materials in steel production. For the time being, however, the ‘activation’ of the CBAM, whereby corresponding tariffs for imports of primary raw materials and steel would also have to be paid on the attributable carbon emissions has been postponed until February 2026.

Nickel producers outside (and inside) Indonesia remain under pressure
Indonesia’s inexpensive nickel, driven by huge reserves, cheap energy and HPAL technology supported by China, continues to dominate global markets. The excess supply puts pressure on traditional producers such as Vale in Australia, Brazil and Canada. The chief executive director of Vale, Gustavo Pimenta, pointed out, therefore, that low prices make it difficult to maintain short-term profitability, although the medium and long-term prospects of nickel for the production of electric vehicles are promising. In the short term, weak demand for stainless steel and the declining market share of EV batteries with nickel chemistry continue to put pressure on the fundamental data of the market.

In view of these challenges, Vale is checking various options, which also include selling assets, forming partnerships or shutting down operations such as the Canadian nickel plants, whereby cost reductions to maintain competitiveness would have priority. The growing dependency of consumers on nickel raw materials from Indonesia also raises concerns about political stability and makes the vulnerability of supply chains a central issue.

Stricter Indonesian nickel regulations and the potential ban on ore exports from the Philippines as the main supplier if there are Indonesian shortages could act as catalysts for disruption. However, the truth is that even Indonesian nickel producers can barely make a profit with the current low NPI prices with their carbon intense nickel products, despite the significant advantages over traditional producers.