Nickel Quarterly Outlook 2026: Market Stagnation vs Growth Catalysts

The nickel market enters 2026 facing a familiar headwind—persistent oversupply colliding with tepid demand growth. Throughout 2025, nickel hovered around US$15,000 per metric ton as Indonesian production flooded global markets, while EV battery makers increasingly shifted toward cheaper lithium-iron-phosphate (LFP) chemistries. For investors tracking nickel versus quarterly market cycles, 2026 looks set to test patience once again.

The Supply Problem: Indonesia’s Continued Dominance

Indonesia’s grip on global nickel supplies tightened further when the government raised its ore output quota in February 2025, jumping from 271 million to 298.5 million wet metric tons. This aggressive expansion followed an already extraordinary surge—production had skyrocketed from 800,000 MT in 2019 to 2.2 million MT by end-2024, fundamentally reshaping market dynamics.

The consequences were immediate and visible in London Metal Exchange warehouses. By November 2025, LME stockpiles had climbed to 254,364 MT, nearly 55 percent above the 164,028 MT level seen at the start of the year. This inventory buildup pushed nickel prices toward US$14,295, dangerously close to break-even for Indonesia’s low-cost producers.

Faced with mounting pressure, Indonesian officials began signaling possible production cuts. Shanghai Metal Market reported that the government is considering reducing annual nickel ore output to approximately 250 million MT in 2026—a sharp reversal from the 379 million WMT target set for 2025. However, final figures remain under negotiation, and analysts remain skeptical about the timing and magnitude of actual reductions.

According to Ewa Manthey, commodities strategist at ING, near-term relief appears unlikely. Indonesia is holding off on aggressive cuts, and market fundamentals suggest the global nickel market will remain surplus by roughly 261,000 MT throughout 2026. “Further cuts would need to be significant to alter fundamentals,” Manthey noted, pointing out that without coordinated international action, price pressure will persist.

Demand Headwinds: From Stainless Steel to EV Batteries

The demand side tells an equally challenging story. Over 60 percent of global nickel consumption flows into stainless steel production, predominantly destined for China’s construction sector. That market has yet to recover from its 2020 collapse. November 2025 housing sales in China plummeted 36 percent year-over-year, with cumulative sales down 19 percent through the first 11 months of the year. Without a property sector turnaround, stainless steel demand—and by extension, nickel demand—will remain subdued.

The EV battery narrative has shifted dramatically. Five years of nickel production growth was predicated on rising battery demand, with nickel-manganese-cobalt (NMC) chemistries positioned as superior due to higher energy density and extended range. That competitive advantage has evaporated. Contemporary Amperex Technology and other major battery manufacturers have aggressively adopted LFP technology, which now achieves ranges exceeding 750 kilometers while remaining cheaper and safer to produce.

The numbers tell the story: year-on-year nickel battery demand rose just 1 percent in September 2025, while LFP demand surged 7 percent. Even worse, policy shifts are compounding headwinds. The elimination of the US EV tax credit in September cratered American EV demand—quarterly sales data from Cox Automotive shows Q4 2025 EV sales dropped 46 percent compared to Q3, and 37 percent year-over-year. Ford Motor scaled back its EV ambitions with a US$19.5 billion writedown, while the EU abandoned its 2035 internal combustion engine ban. These policy reversals signal weakening support for energy transition, further dampening battery metal demand.

The 2026 Nickel Price Forecast: Patience Required

Given structural headwinds, analyst consensus points to continued weakness. ING forecasts average nickel prices of US$15,250 throughout 2026, with price struggles to hold above US$16,000. The World Bank projects similar weakness at US$15,500 for 2026, rising modestly to US$16,000 in 2027. Russia’s Nornickel, one of the world’s largest producers, expects a refined nickel surplus of 275,000 MT in 2026.

Upside scenarios remain limited. Prices would need unexpected supply disruptions or surprisingly robust stainless and battery demand to spike above US$19,000. Most strategists view sustained levels above US$20,000 as unlikely without coordinated supply management and materially improved market sentiment.

For investors benchmarking nickel performance quarter-to-quarter through 2026, the trajectory looks decidedly sideways. Until fundamental shifts emerge—whether through coordinated producer action, Chinese property sector recovery, or a surprise acceleration in EV demand—nickel appears locked in a prolonged consolidation phase rather than poised for recovery.