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China is amassing huge quantities of nickel, taking advantage of low prices to bolster its reserves of the metal vital to stainless steel and electric vehicle batteries in the face of an escalating trade war with the US.
Beijing is estimated to have bought up to 100,000 tonnes of nickel for its state reserves since December, according to two people familiar with the matter as well as a Financial Times analysis of China trade data and withdrawals from the London Metal Exchange. Three other people confirmed the purchases but did not provide a figure.
Industry experts said Beijing’s nickel stockpile was estimated at 60,000 to 100,000 tonnes before the latest round of purchases, meaning China is thought to have doubled it this year. China does not regularly disclose the volume of its metal reserves.
“There has been a big increase in Chinese imports of nickel metal and it’s going into the government’s strategic stockpile,” said one senior industry figure.
The build-up comes as Beijing looks to secure its supply chains at a time of increasing geopolitical tensions with Washington, and as nickel prices have hit their lowest levels since 2020. China dominates the global supply chain of critical minerals and rare earths, and uses them as leverage over trading partners.
China’s National Food and Strategic Reserves Administration, the government agency that manages official stockpiles, has been purchasing high-purity nickel, known as “class one” metal, since December, the people said.
Customs data shows China’s purchases of pure nickel reached 77,654 tonnes in the first five months of 2025, the highest level of purchases for the period since 2019 and more than double the volume over the same period last year. Class one nickel is used in electroplating for consumer goods and aerospace as well as production of EV batteries.
However, consumption of class one nickel is only growing at 5-10 per cent per year, according to one leading industry analyst. The International Nickel Study Group has forecast total nickel demand in China will increase 4.9 per cent in 2025, including lesser grades such as nickel pig iron and other nickel products.
That mismatch “is a smoking gun for stockpiling”, the industry figure said.
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China is also stockpiling other industrial metals, according to a person close to a government trading partner. The strategic reserves administration indicated in a March notice that it was looking to buy nickel, lithium, cobalt and copper for the state stockpile, the person said.
Nickel prices have slumped about 40 per cent over the past two years due to rapid expansion of production in Indonesia, which holds to the world’s largest nickel reserves and controls two-thirds of global supply. Export controls on raw nickel in the past have hurt Chinese steel producers.
“Because the nickel price crashed last year, it was actually a good time to gear up the national reserve,” the person added.
Chinese purchases could even be providing a floor for nickel prices, which have also been hit by slowing demand for nickel-based EV batteries, the people familiar with the matter said.
Withdrawals of class one nickel from the global network of LME warehouses also indicate unusual trade patterns. LME data shows global buyers withdrew 78,798 tonnes between January and June 27, far higher than the 17,544 tonnes over the same period last year and outpacing even the 44,106 tonnes for all of 2024.
The LME said nickel trading volumes hit the highest quarterly level in the latest three months since the start of 2020.
“The idea of China stockpiling nickel is something we’ve been having lots of conversations about with market participants and clients,” said one market analyst.
China is probably buying class one nickel originating from Indonesia — whose supply into the LME has surged in the past year since the exchange allowed refined nickel produced by Indonesian and Chinese companies into its warehouses. China is also likely to be buying from domestic production, which is not reflected in the LME or import data, the people said.
China’s strategic reserves administration and state council did not respond to requests for comment.