Update on Nickel & Stainless Steel Supply and Prices

Update on Nickel & Stainless Steel Supply and Prices

OMCO SUMO Insights
May 2022

In March 2022, trading was halted for Nickel on the London Metals Exchange (LME) as the 3-month Nickel contract jumped from around $25,000 to $100,000 USD per tonne due to supply fears from the Russia-Ukraine war. Nickel price is a major driver of stainless-steel price, and stainless-steel buyers all over the world were alarmed by the potential for huge increases in costs and lead times. Now in May, Nickel contracts are already back to about where they were before March, as global producers work to increase supply.

The United States does not produce any significant amount of nickel, and is nearly 100% dependent on foreign imports and scrap for this key commodity.

Two-thirds of all nickel is Class II nickel — mined and produced for stainless steel. Global output of stainless-steel rose by 10.6% to 56.3 million tonnes last year, according to the International Stainless Steel Forum. Nickel makes up only a small percentage of stainless steel in terms of mass (e.g. 8% in 304), but it contributes around 60% of the cost.

The other 1/3 of nickel production is a higher-purity (less carbon) Class I nickel, which can be converted to nickel sulphate for batteries. The March LME Nickel price spike was mainly due to buyers scrambling to acquire existing stocks of Class I nickel for batteries.

Class I and Class II nickel are essentially 2 separate commodities and markets. In good news for industrial buyers of stainless-steel components such as bearings or conveyor chain, 2022 is likely to have a surplus in nickel for stainless-steel. Goldman Sachs believes Indonesia production will drive a surplus of lower-grade Class II nickel of 112,000 tonnes in 2022, but forecasts a 196,000-tonne deficit of Class I material.

For a more in-depth analysis, read this excellent article by analyst Andy Home.

Column: Nickel demand boomed in 2021; this year it will be supply – MINING.COM

There may not be a crisis for stainless-steel after all.


Curious to learn more? Click here to subscribe to the OMCO SUMO Insights newsletter for insights and best practices for sustainable sourcing of bearings, conveyors, and other motion-related products, or contact us directly at You can also follow us on LinkedIn

eng assembly

OMCO SUMO is a manufacturer and global OEM supplier focused on ESG and sustainable sourcing for bearings, engineered assemblies, and motion-related components across all industries requiring mechanical power transmission. Established in 1964, with our extensive experience and global supplier networks from over 50 years in business, we are deeply knowledgeable and passionate about helping customers achieve sustainable sourcing and ESG goals, focusing on both the integrity of product performance and the corresponding influence on human rights, the environment, and fair business practices. OMCO is the first and only provider of proprietary ESG ratings within the power transmission industry covering an extensive and expanding network of manufacturers throughout Asia that provide high-quality lower-cost products, and often sharing the same supply chain with well-known premium brands without the accompanying overhead. Our goal is to support our customers with transparent values-driven business practices that help achieve sustainability of the triple bottom line: people, profit, and planet.  


How can we help you achieve motion design, fulfillment & ESG goals?

Contact OMCO SUMO for more information on sustainably sourced, ESG compliant solutions for bearings, conveyor chains, and related components, and our proprietary quarterly ESG Ratings Report for Chinese Bearing Manufacturers, providing granular metrics about an extensive and expanding network of manufacturers throughout Asia.

Get In Touch

  • This field is for validation purposes and should be left unchanged.