VINACHEM

Chinese refined nickel exports could almost treble this year, as domestic overcapacity produces yet another glut of metal that will have to be absorbed by overseas markets.

The country flipped to a net exporter of refined nickel, a metal used in electric vehicle batteries and for stainless steel, for the first time in 2024, with annual sales of 25,000 tons. Mysteel Global reckons that could rise to nearly 70,000 tons this year, adding nickel to the list of commodities that China overproduces and ships abroad to clear its surplus.

World markets have been contending with massive outflows of Chinese steel and aluminum during the past decade, prompting a slew of anti-dumping measures over the years. A slowing economy and relentless smelter expansions saw refined copper exports spike to a record last summer.

As with copper, Beijing has prioritized ensuring ample supplies of a key metal for the energy transition. Refined nickel production rose 36% to 335,000 tons in 2024, according to Mysteel. Despite being plagued by overcapacity, local authorities have little incentive to rein in smelters if they’re to hit their economic growth targets.

The price of refined nickel, a purer form of the metal deliverable on the London Metal Exchange, the world’s benchmark, has halved over the last couple of years due to a boom in Indonesian output and weaker demand. Jakarta’s ambitious plan to cut production this year will still leave the global market oversupplied, according to Macquarie Group.

The surge in Chinese exports is showing up in the LME’s warehouses and keeping prices under pressure, said Mysteel analyst Fan Jianyuan. LME inventory has more than doubled over the past year to nearly 176,000 tons, with about 80% of that lodged in Asian sheds.

Still, the surge in refined nickel exports is unlikely to face as much scrutiny from China’s trade partners as other materials. The metal is produced in bigger volumes worldwide as lower-grade nickel pig iron, which doesn’t meet LME standards.

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