Global nickel market faces oversupply; MHP profitability under pressure
Friday, October 3 2025 - 08:44 AM WIB
By Adianto P Simamora
The global nickel market is expected to remain in oversupply through at least the next two years, with weak demand growth and excess capacity weighing on profitability—particularly in the downstream segments such as Mixed Hydroxide Precipitate (MHP) and nickel metal, according to Jerome Baudelet, CEO of Eramet Indonesia.
Baudelet noted that while mining operations remain competitive, especially in Indonesia, downstream nickel products are under pressure due to slower-than-expected growth in the electric vehicle (EV) and battery sectors.
“We will still have oversupply next year, probably the year after… more positive for NPI and ferro-nickel than nickel metal,” he said during the Green Mineral Investment Forum (IGMIF) 2025.
“The battery market is developing, but not as strongly as expected… other technologies are also being prioritized.”
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Indonesia, which has emerged as a global hub for nickel processing, has developed large-scale capacity for MHP to support battery-grade nickel production. However, Baudelet warned that profitability in this segment will remain challenging due to excess supply and stagnant short-term demand.
In contrast, the market for nickel pig iron (NPI) and ferro-nickel—used primarily in stainless steel—appears more balanced. Baudelet said that investment in new smelting capacity has slowed, allowing supply and demand to stabilize.
“Stainless steel is growing at a rate of 3 to 5 percent a year. The capacity built in Indonesia is still excessive for now, but I think it will stabilize for the NPI.”
He added that while the oversupply poses near-term risks, Indonesia remains strategically positioned to move further downstream—into high-value segments like precursor (PCAM) and cathode active materials (CAM)—if global demand rebounds.
Editing by Reiner Simanjuntak