Nickel market set for steady growth as stainless steel and ev demand reshape supply

The global nickel market is entering a period of sustained expansion, driven by strong stainless steel production and accelerating investment in battery-grade refining. According to the latest analysis from Mordor Intelligence, global nickel volume reached approximately 3.40 million tons in 2025 and is expected to grow from 3.55 million tons in 2026 to 4.39 million tons by 2031, reflecting a compound annual growth rate (CAGR) of 4.36%.

Much of this growth is anchored in Asia, where rising stainless steel output—particularly in China and Indonesia—continues to absorb large volumes of nickel. At the same time, increasing capital flows into battery-grade refining are reshaping the market’s long-term structure. While batteries currently account for a smaller share of total nickel demand, they play a strategically critical role, especially for Class I nickel, which is essential for electric vehicle (EV) cathode materials.

Strategic Shifts in Battery-Grade Nickel Supply

One of the most notable developments is the acceleration of battery-grade refinery projects, particularly in North America. New facilities in the United States and Canada reflect a broader push toward localized, lower-carbon supply chains that support EV manufacturing and energy transition goals. Although some refinery projects have been delayed or canceled, investment momentum remains strong, driven by long-term demand forecasts and sustainability requirements.

At the same time, the industry is grappling with a structural shortage of high-quality Class I nickel. Despite periods of overall market surplus, supply of battery-suitable nickel remains tight. Producers capable of upgrading lower-grade material through advanced refining technologies are gaining a competitive advantage, underscoring the growing importance of processing capability—not just raw resource availability.

Sustainability and Sourcing Pressures Intensify

Sustainability is becoming a defining factor in nickel procurement strategies. Automakers are tightening carbon-emissions standards across their supply chains, pushing mining and refining companies to adopt renewable energy sources, traceability systems, and cleaner production methods. While standardized “clean nickel” contracts have yet to emerge, private agreements and investor pressure are increasingly shaping sourcing decisions and regional supply strategies.

However, risks remain. Potential export restrictions from the Philippines, along with emerging deep-sea mining initiatives, could introduce new volatility and reshape long-term market dynamics.

Regional Outlook: Investment, Constraints, and Opportunity

Regionally, North America is prioritizing domestic supply security, aligning nickel projects with EV and clean-energy manufacturing. Mexico benefits from its proximity to U.S. automotive hubs, although trade uncertainties continue to pose challenges.

In Europe, strict sustainability regulations and rising operating costs are driving investment in greener refining technologies. South America, led by Brazil’s resource base, remains attractive to investors despite infrastructure constraints. Meanwhile, the Middle East and Africa are emerging as future players, with growing interest from Gulf investors seeking to diversify into strategic minerals critical to electrification.

As demand from both stainless steel and electric vehicles continues to evolve, the nickel market is increasingly defined by quality, sustainability, and refining capability—factors that will shape competitive positioning well beyond 2031.