APAC Nickel Market Outlook to 2030

APAC Nickel Market Overview

• The Asia Pacific Nickel Market was valued at approximately USD 20 billion in 2023, driven by the growing demand for nickel in electric vehicle (EV) batteries, stainless steel production, and clean energy technologies. The shift towards green energy and increasing nickel consumption in the battery industry, particularly for lithium-ion batteries, is expected to fuel market growth in the coming years.

• Leading companies in the APAC Nickel market include Vale S.A., BHP Billiton, Jinchuan Group, Sumitomo Metal Mining, and Nickel Asia Corporation. These companies dominate nickel production, supply, and export, playing a crucial role in meeting the rising demand for nickel in multiple industries, particularly EV and battery production.
• Major urban centers driving the market in the Asia Pacific region include Shanghai, Mumbai, and Sydney. Shanghai's prominence is largely due to China's leadership in stainless steel and EV battery production. Mumbai plays a key role in nickel consumption due to Indias expanding manufacturing base, while Sydney is home to some of the world's largest nickel mining companies.
• In February 2024, Vale signed a long-term supply agreement with Tesla to deliver Class 1 nickel products for use in their EV batteries. This partnership strengthens Vales position in the EV battery supply chain and highlights the growing demand for high-quality nickel from the automotive sector.

APAC Nickel Market Segmentation

The APAC Nickel Market can be segmented based on product type, application, and region:

• By Product: The market is segmented into Class 1 Nickel and Class 2 Nickel. In 2023, Class 1 Nickel held the dominant market share, driven by its use in EV batteries and clean energy technologies. The high purity of Class 1 Nickel makes it ideal for battery production, which is expected to grow rapidly during the forecast period.

• By Application: The market is segmented into stainless steel, EV batteries, alloys, and plating. In 2023, the stainless-steel segment dominated the market due to the substantial demand for nickel in stainless steel production across industries such as construction, automotive, and consumer goods. However, the EV battery segment is expected to witness the highest growth during the forecast period due to increasing adoption of electric vehicles.

• By Region: The APAC market is segmented by country into China, Indonesia, Australia, Japan, and the Philippines. In 2023, Indonesia led the market with the highest production of nickel, driven by its vast nickel reserves and government support for nickel mining and processing. Indonesia's aggressive investment in nickel-based battery supply chains has further propelled its growth.

APAC Nickel Market Competitive Landscape

• Vale S.A.: In March 2024, Vale announced plans to expand its nickel production capacity by 15% by 2025 through new investments in its Indonesian operations. This expansion is aimed at meeting the growing demand for Class 1 Nickel used in electric vehicle batteries.
• BHP Billiton: In July 2022, BHP signed a Memorandum of Understanding (MOU) with Ford Motor Company for a targeted multi-year nickel supply agreement, potentially starting in 2025. The agreement aims to enhance sustainability in battery supply chains and explores supplying nickel from BHP's Nickel West asset in Australia, known for its low carbon intensity production methods.

APAC Nickel Industry Analysis

Growth Drivers

• Increased Demand for Nickel in EV Battery Production: The growing adoption of electric vehicles (EVs) is one of the primary drivers of nickel demand in the APAC region. According to the International Energy Agency (IEA), In 2023, global electric car sales neared 14 million units, with just under 60% of new registrations occurring in China. Nickel is a crucial component in lithium-ion batteries, and the demand for battery-grade nickel has surged as a result. In 2024, Chinas battery-grade nickel demand is expected to exceed 1.2 million tonnes due to government initiatives aimed at reducing carbon emissions and promoting sustainable transport solutions.
• Rising Stainless Steel Production: Stainless steel, which accounts for over 65% of global nickel consumption, continues to be a dominant application in the APAC market. As per the World Steel Association, China produced 1.019 billion tonnes of steel in 2023, followed by India which reached produced 140.2 million tonnes of crude steel, with stainless steel being a noteworthy portion. This growth in stainless steel production is supported by industrial expansion in sectors like construction, manufacturing, and consumer goods.
• Government Support for Clean Energy: Governments across the APAC region, particularly Indonesia and the Philippines, have introduced initiatives to enhance local nickel refining capacities. Indonesia, extended its export ban on unprocessed nickel in 2023 to encourage domestic processing, aiming to meet the growing demand from the EV and stainless steel sectors. By 2024, the Indonesian government expects domestic nickel refining capacity to increase by 15%, supporting its ambitions to become a global hub for nickel-based battery production.

Challenges

• Environmental Regulations and Sustainability Concerns: The environmental impact of nickel mining and processing has come under increasing scrutiny. Countries like Indonesia and the Philippines, which have large nickel reserves, face challenges in balancing economic benefits with environmental sustainability. In 2023, stricter environmental regulations were imposed by the Philippine Department of Environment and Natural Resources (DENR), requiring companies to adhere to stringent waste management and land rehabilitation practices.
• Limited Infrastructure for Nickel Refining: While demand for refined nickel, especially for battery applications, continues to grow, the infrastructure for refining in the APAC region remains underdeveloped. Indonesia, despite being a major producer of nickel ore, still faces infrastructure challenges in expanding its processing capacity to meet global demand. The current gap in refining capacity limits the ability of the region to capitalize fully on the growing demand for battery-grade nickel.

Government Initiatives

• Indonesia's Nickel Industrialization Strategy: Indonesia is the world's largest nickel producer, with an estimated output of 1.8 million tonnes in 2023, accounting for approximately 40% of global nickel supply. The country has significantly ramped up production following a 2020 export ban on unprocessed ore, which aimed to develop its domestic nickel refining sector.
• Chinas EV Policy Support: China's New Energy Vehicle (NEV) Industrial Development Plan (2021-2035) aims to boost the market share of NEVs, targeting 20% of total car sales by 2025. This initiative has spurred domestic production of lithium-ion batteries, which are heavily reliant on nickel.

APAC Nickel Market Future Outlook

The APAC Nickel Market is expected to experience robust growth during the forecast period, driven by rising electric vehicle adoption, growing stainless steel demand, and increasing government support for nickel processing and clean energy technologies.

Future Market Trends

• Expansion of Nickel Supply for EV Batteries: Over the next five years, the APAC nickel market will see a substantial increase in demand for battery-grade nickel as the region's electric vehicle industry expands. By 2028, nickel demand from the EV battery sector is expected to double, driven by new production capacity in Indonesia, Australia, and the Philippines.
• Adoption of Sustainable Mining Practices: With growing environmental concerns, nickel producers in APAC are increasingly focusing on adopting sustainable mining and processing practices. By 2028, advancements in green technologies for nickel mining could lead to reduced environmental impacts and lower operational costs.