China's Refined Nickel Imports Hit Decade Low as Indonesian Trade Reshapes Global Market

In 2023, China's refined nickel net imports reached a near-decade low, highlighting significant changes in the global production landscape. The country has been decreasing its dependence on high-purity Class I nickel, instead increasing imports of various nickel forms from Indonesia, mainly for its stainless steel industry and electric vehicle battery production. A major shift occurred after Indonesia banned nickel ore exports in early 2020. Chinese companies responded by establishing processing facilities in Indonesia, changing the trade dynamics between the two countries. Consequently, nickel pig iron (NPI) from Indonesia now dominates this trade, especially for China's vast stainless steel sector. In 2023, trade in NPI alone surged by 47% to 7.92 million metric tons. Additionally, Indonesia is processing more nickel into forms like matte and mixed hydroxide precipitate (MHP), mainly used in battery precursors. China's imports of these materials have seen dramatic increases, with matte imports rising to 300,500 tons and MHP to 1.32 million tons in 2023, with the majority originating from Indonesia. Indonesia's mined production has also grown significantly, making it a major global nickel producer. This surge in Indonesian production has led to a reduction in China's need for refined nickel imports. In 2023, these imports dropped by 42% from the previous year, reaching their lowest since 2005. A new trend in China is the increasing export of refined nickel, indicating a shift in its role in the global market. This is partly due to Chinese plants’ capability to convert intermediate products into refined metal, bridging the gap between Class I and Class II nickel types. Moreover, China is evolving in the nickel sulphate market, crucial for battery production. While traditionally importing sulphate, notably from Finland and South Korea, China has started importing from Indonesia and increasing its own sulphate production. Its exports of nickel sulphate jumped to 17,000 tons in 2023, signaling the emergence of a new sub-market. This evolution in China's nickel trade, especially with Indonesia, is reshaping the global nickel market and could impact nickel's pricing models.