Nickel sits at the intersection of old economy steel and new economy batteries. Stainless steel still absorbs most of the metal, but electric vehicles and energy storage are steadily changing the demand profile. At the same time, heavy investment in Indonesian supply has created a visible surplus that is forcing a reset of expectations, prices, and project economics.
For traders, miners, refiners, and financiers, the question is not whether nickel demand will grow. It is how fast each demand segment expands, and how long the current oversupply lasts before the market tightens again. That dynamic will decide which projects remain bankable, which assets are stranded, and where trade finance capital earns an acceptable risk adjusted return.
Understanding the demand mix is the starting point for any growth forecast. Stainless steel remains the anchor use for nickel, while batteries are the fastest growing segment.
Industry data indicates that stainless steel accounts for around 60 to 70 percent of global nickel demand, depending on the year and definition. Batteries have moved from a low single digit share a decade ago to more than 10 percent and in some estimates above 15 percent of demand, largely due to electric vehicles. Other uses include specialty alloys, plating, and chemicals for industrial applications.
Even with the rise of nickel free lithium iron phosphate batteries, battery grade nickel remains a critical input for high energy density chemistries used in long range vehicles and some grid storage systems.
Asia Pacific dominates nickel consumption, with China as the core buyer for stainless steel and battery supply chains. Several estimates place the region at more than 80 percent of refined nickel demand, supported by infrastructure spending, automotive production, and consumer goods demand.
This concentration means that Chinese policy choices, Indonesian mining decisions, and downstream battery capacity build outs have an outsized influence on global nickel flows and prices.
Over the past two decades, nickel demand has grown broadly in line with industrial development. Data from the International Nickel Study Group shows that world nickel usage increased from roughly 1.1 million tonnes in 2000 to about 2.4 million tonnes in 2020, which implies an average annual growth rate close to 4 percent. In the decade from 2010 to 2020, growth accelerated to around 5 percent per year as Chinese stainless steel production expanded.
More recent numbers are higher in absolute terms but show a market that is currently oversupplied. INSG estimates indicate primary nickel usage of about 3.19 million tonnes in 2023 and 3.42 million tonnes in 2024, with forecasts of 3.60 million tonnes in 2025 and 3.82 million tonnes in 2026. Production has been higher still, with surpluses of more than 100 thousand tonnes per year expected through the mid 2020s, mainly due to large capacity additions in Indonesia.
Several analyst houses see demand continuing to grow in the low to mid single digits annually through 2030 on a volume basis, even after adjusting for slower battery growth and the wider use of LFP chemistries. This near term picture combines healthy real economy demand with pricing pressure from oversupply and producer cost differentials.
The energy transition reshapes nickel demand because high nickel cathode chemistries are prevalent in many electric vehicle platforms and some stationary storage solutions. Scenario work by the International Energy Agency and other groups highlights how sensitive nickel demand is to EV adoption paths and policy choices.
| Scenario | Approximate Total Demand 2030 | Approximate Total Demand 2040 | Comment |
|---|---|---|---|
| Conservative | 4.0 to 4.5 Mt | 4.5 to 5.0 Mt | Moderate EV uptake, strong role for LFP, stainless steel remains main driver |
| Base Case | Around 4.9 Mt | 5.0 to 5.5 Mt | Battery nickel demand grows to around 1.0 to 1.5 Mt by 2030, energy transition progresses on current policies |
| Net Zero Aligned | More than double 2020 demand | Roughly three times 2020 demand | Rapid EV deployment, high energy storage buildout, aggressive decarbonization of heavy industry |
In a stated policies path, several public sources suggest global nickel demand could reach somewhere between five and six million tonnes by 2040, up from roughly three million tonnes in the early 2020s. In more ambitious net zero aligned scenarios, nickel demand is projected to increase by around 200 percent by 2030 from 2020 levels and to be close to triple by 2040.
These figures are not precise forecasts. They are directional indicators that show how closely nickel demand is tied to the success or failure of decarbonization strategies in transport, storage, and industry.
Battery nickel has been the headline story for several years, but the narrative is more nuanced in 2024 and 2025 than the earlier straight line projections suggested.
A few years ago, some projections pointed to battery nickel demand reaching around 1.5 million tonnes by 2030. More recent industry commentary has trimmed that figure due to the rapid adoption of LFP chemistries in China and cost pressure on automakers. Updated expectations sit closer to 950 thousand to 1.0 million tonnes of nickel demand from the battery sector by 2030, up from roughly half a million tonnes in 2024.
Even after these downward revisions, batteries still account for the majority of incremental nickel demand growth over the coming decade in many forecasts.
Lower but still strong battery demand growth collides with an investment cycle that brought significant Indonesian capacity online. The result is a market where prices have fallen sharply from their 2022 peaks and where a meaningful share of high cost producers is at or below cash cost. Over time, closures and reduced investment in marginal assets are likely to tighten the market again, particularly for higher grade material suitable for batteries.
For financiers, this means screening nickel projects for cost competitiveness, ESG performance, and clear routes into either stainless or battery value chains rather than relying on headline EV growth alone.
Stainless steel will continue to carry most of the tonnage. Construction, infrastructure, consumer goods, and industrial equipment all pull on stainless demand, and stainless in turn pulls on nickel. Many market studies expect stainless steel to retain a share of 60 percent or more of total nickel usage well into the 2030s.
Non battery, non stainless uses such as alloys for aerospace, chemical catalysts, and plating also provide steady baseload demand with their own cyclical patterns. These segments are smaller in volume but important for overall profitability in some product lines.
The combination of structural demand growth, current oversupply, and regional concentration creates a very specific risk profile for nickel in trade and project finance.
Yes. Global nickel usage has increased over time, from around 1.1 million tonnes in 2000 to more than 3 million tonnes in the early 2020s. The current surplus is driven by supply growth that has outpaced demand in the short term, especially due to Indonesian expansions, not by a collapse of underlying consumption.
Estimates vary, but a common pattern in public data is that battery nickel demand could reach roughly one million tonnes by 2030, up from a few hundred thousand tonnes a decade earlier. That would represent most of the incremental growth compared to today, even if stainless steel remains the largest single demand segment.
LFP batteries have captured a large share of the mass market in China thanks to lower cost and improved performance, and this has reduced some of the most aggressive earlier projections for nickel use in EVs. High nickel chemistries will still be used where energy density, range, or performance is critical. The result is a more balanced picture rather than a simple replacement.
No one can predict prices with precision, but a sustained surplus and high inventories usually cap price rallies in the short term. Over a longer horizon, if demand continues to grow and higher cost production is forced out of the market, prices can recover to levels that support only the more competitive producers. The transition from surplus to balance is where project selection and financing discipline matter most.
Yes, provided that structures are built around sound assets and counterparties. Well managed mines, refiners, and traders with competitive cost positions and strong offtake can still support attractive short tenor trade finance facilities. Weak projects that depend on very high nickel prices or speculative monetization of undeveloped resources are much harder to justify.
Financely works with producers, traders, and end users of battery metals and stainless steel inputs that need credible trade and project finance solutions. We focus on transactions with clear counterparties, documented cash flows, and realistic market assumptions rather than price speculation.
Share your transaction profile if you are developing or trading nickel and related commodities and need structured trade finance or forward flow arrangements that match real world risk.
Request Trade Finance SupportDisclaimer: This page is for general information only and does not constitute investment, legal, tax, or other professional advice. Market data and forecasts referenced here are based on third party sources believed to be reliable at the time of writing, but they may change without notice and may not be complete. Nickel prices and demand can be volatile and are influenced by macroeconomic, technological, regulatory, and geopolitical factors. Financely does not provide investment management services and is not a bank, broker dealer, or commodity trading house. Any financing, trading, or investment decision should be based on independent analysis and formal documentation with regulated counterparties.
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