Nickel Price Fluctuations: The Impact of Oversupply and the Electric Vehicle Trend

Over the past decade, nickel prices have fluctuated significantly in line with global market dynamics.

According to World Bank data, nickel prices reached their lowest point in 2016 but surged to record highs in 2022, as shown in the graph.

The United States Geological Survey (USGS) cites various factors influencing nickel price volatility.

In its *Mineral Commodity Summaries 2017* report, the USGS attributed the 2016 price plunge to an oversupply in the market.

The USGS noted that in 2016, nickel production from major producing countries increased while demand decreased.

Subsequently, global nickel prices rebounded due to reduced production in several countries from 2017 to 2019, followed by Indonesia's ban on raw nickel exports in 2020.

Nickel prices strengthened further in 2021. Citing its *Mineral Commodity Summaries 2022* report, the increase was driven by expectations of rising nickel use in electric vehicle batteries and increased stainless steel demand.

The USGS attributes the record high nickel prices in 2022 to these same factors.

However, nickel prices fell in 2023. The World Bank's October 2023 *Commodity Markets Outlook* attributes this decline to increased nickel supply, particularly from Indonesia.

Amidst rising supply, the World Bank notes a decrease in nickel battery demand in 2023, due to a shift in electric vehicle manufacturers' preference towards lithium iron phosphate (LFP) batteries.