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Nickel prices have seen an uptick primarily due to ongoing supply constraints coupled with robust demand, particularly from the stainless steel sector. Indonesia's nickel ore shortage, primarily ascribed to the delays in the allocation of mining licenses, has significantly influenced market dynamics. This shortage has forced several nickel smelters to either curtail operations or shut down entirely. Although some resumed operations post-maintenance, they are still operating below capacity due to the raw material scarcity.

Demand for nickel has also been unexpectedly strong from the stainless steel industry, which began ramping up earlier than anticipated and appears likely to continue. This increased demand coincides with a general rise in steel demand globally, prompting manufacturers in China, Taiwan, and other Asian countries to hike steel prices for May and June 2024.

Furthermore, political unrest in New Caledonia, a key nickel-producing region, has further complicated the supply situation. Pro-independence protests there temporarily disrupted production, leading to a sharp 7% rise in nickel prices on the London Metal Exchange to $21,150 a tonne. While prices have slightly receded, they remain about 5% higher than before the unrest.

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Amidst these market pressures, trade policies have also impacted metal prices. The US government escalated Section 301 tariffs on steel and aluminum imports from China from as low as 0% up to 25%, targeting unfair trade practices like dumping. Additionally, the European Commission has extended anti-dumping measures on stainless steel tubes from China, with duties ranging from 48.3% to 71.9%, under Regulation (EU) 2024/1475, to protect EU manufacturers and maintain fair competition in the market.