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Global stainless steel demand and its impact on nickel
Stainless steel melt shop production increased 5.5% year-on-year, to 14.6 million metric tons, in the first 3 months of 2024. It comes as WorldStainless, a not-for-profit research and development association, forecasts an increase of 3.2% for stainless steel consumption in 2025.
This is important for nickel.
As we highlighted in our last post, Nickel is not just for Electric Vehicles, stainless steel is the largest consumer of nickel, accounting for over 66% of total nickel production.
As an alloy, nickel enhances resistance to corrosion, increases toughness, as well as improving formability, weldability and ductility.
Nickel is so important in stainless steel that, according to the Nickel Institute, nickel-containing stainless steel grades make up 80% of stainless steel production.
Stainless steel itself is a critical metal across construction, automotive and aerospace industries, and consumer goods.
Some of the major producers behind this growth in global stainless steel demand includes:
- in China, stainless steel production reached 8.6 million tons in Q1 2024, a 2.1% year-on-year increase according to the China Stainless Steel Society
- Indonesia's stainless steel production is forecast to grow by approximately 20% in 2024, as the country continues to invest in infrastructure and industrial development
- in India, initiatives to create a conducive policy environment for the development of the steel sector and to promote ‘Make in India’, has helped a Compound Annual Growth Rate (CAGR) of 4.36% from 2018-2024
As stainless steel production rises, so nickel demand can be anticipated to increase.
The challenge is that, as we flagged in another recent blog post, Nickel: short-term pain, long-term gain, many nickel miners across the world — especially in Australia — are closing.
Rising demand in the largest consumer of nickel, just as supply is tightening, suggests investors should expect an increase in market volatility.
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