## Nickel's 2026 Outlook: Why Prices May Struggle to Break Out from Current Pressure

The nickel market enters 2026 facing a familiar foe: persistent oversupply crushing price momentum. Throughout 2025, nickel traded around US$15,000 per metric ton, trapped in a narrow band that left producers frustrated and investors cautious. Looking ahead to the coming year, analysts warn that without substantial shifts in market dynamics, nickel prices are likely to remain under pressure for much of 2026.

### The Indonesian Supply Dilemma

Indonesia's role as the world's largest nickel producer continues to define the metal's trajectory. Production has ballooned dramatically—the nation churned out 2.2 million metric tons in 2024 compared to just 800,000 MT in 2019. This explosive growth has flooded global markets with nickel, creating stockpiles that now sit at the London Metal Exchange's warehouses at record levels.

By November 2025, LME stockpiles had climbed to 254,364 MT, nearly 55 percent higher than the 164,028 MT recorded at the start of the year. In February 2025, Indonesian authorities raised their quota system, pushing nickel ore output capacity to 298.5 million wet metric tons from 271 million WMT in 2024—ostensibly to ramp up production from major mining zones.

However, as prices have deteriorated, the calculus is shifting. With nickel dipping to US$14,295, profitability margins for even low-cost Indonesian operators have tightened considerably. Discussions surrounding production cutbacks have intensified, with reports suggesting the Indonesian government may target output around 250 million MT in 2026—a sharp reversal from 379 million WMT in 2025. Yet these negotiations remain fluid, and final targets haven't been locked in.

The structural question is whether Indonesia will actually follow through on reductions. Ewa Manthey, commodities strategist at ING, maintains a cautious view. She argues that global nickel supply is projected to remain in surplus by around 261,000 MT in 2026, meaning even deeper cuts would be needed to genuinely rebalance markets. Indonesia also has new policy levers in play: a dynamic royalty system introduced in April that ranges from 14 to 18 percent depending on nickel price levels, and mining license reforms implemented in October that compress validity periods from three years to one, granting officials tighter production oversight.

### Demand Headwinds: Multiple Fronts

On the consumption side, the picture is equally challenging. Stainless steel, which accounts for over 60 percent of global nickel demand, depends heavily on Chinese construction markets. China's property sector, though subject to government stabilization efforts in 2024 and early 2025, continues deteriorating. November housing sales plunged 36 percent year-over-year, and cumulative sales through the first 11 months of the year fell 19 percent. This housing malaise has sapped stainless steel orders and kept nickel demand subdued.

The electric vehicle sector, long seen as nickel's growth engine, is also showing signs of stress. Battery makers including Contemporary Amperex Technology have pivoted toward lithium-iron-phosphate (LFP) chemistries, which have narrowed the performance gap with traditional nickel-manganese-cobalt batteries. Modern LFP technology now enables vehicle ranges exceeding 750 kilometers while offering cost advantages and enhanced safety profiles compared to nickel alternatives.

Data tells the story: nickel battery demand rose just 1 percent year-on-year in September 2025, while LFP demand jumped 7 percent. This shift is particularly acute in Western markets. US EV sales, buoyed by the now-expired US$7,500 tax credit, have cratered in the fourth quarter—dropping 46 percent compared to Q3 and falling 37 percent compared to the same quarter in 2024. Major automakers like Ford Motor have responded by scaling back EV commitments, recording a US$19.5 billion writedown and redirecting resources toward extended-range vehicles and hybrids. Meanwhile, the European Union abandoned its plans to ban internal combustion engines by 2035, signaling reduced commitment to rapid electrification timelines.

### 2026 Nickel Price Outlook: Limited Upside

These converging headwinds point toward a challenging price environment. ING's Manthey projects nickel will struggle holding above US$16,000 in 2026, with the organization expecting an average price of US$15,250. This aligns closely with the World Bank's forecast of US$15,500 for 2026, rising modestly to US$16,000 by 2027. Upside catalysts remain narrow—a major supply disruption or unexpectedly robust stainless or battery demand could provide relief, but sustained pricing above US$19,000 appears improbable under current fundamentals.

Russia's Nornickel, another global production heavyweight, projects a market surplus of 275,000 MT of refined nickel in 2026. Until supply-demand equilibrium materializes or demand drivers accelerate meaningfully, nickel investors should brace for an extended period of price suppression in both the near and medium term.

The big takeaway: nickel's path forward hinges on whether major producers coordinate production discipline, whether Chinese property markets stabilize, and whether energy transition policies regain momentum. Absent these shifts, nickel news today suggests the metal will remain range-bound and under selling pressure throughout 2026.