- Oversupply deepens as Indonesian output expands
- Stainless steel, battery demand recovery remains delayed
SteelDaily: The global nickel market is expected to remain under sustained pressure in 2026, weighed down by persistent oversupply and sluggish downstream demand recovery. Market participants widely expect prices to continue searching for a bottom as Indonesian supply growth outpaces consumption, keeping sentiment fragile across the stainless steel and battery value chains.
Global primary nickel oversupply is projected to reach around 270,000 tonnes (t) of nickel metal in 2026. The imbalance stems largely from Indonesia, where large-scale additions in nickel pig iron (NPI) and downstream intermediate products have structurally altered global supply dynamics. A market participant noted, “We are exploring a low point due to sustained pressure from Indonesian supplies.”
Oversupply pressures build on 2025 trends
In 2025, refined nickel production lines continued operating at high utilisation rates, while new Indonesian NPI capacities ramped up. However, stainless steel demand growth failed to absorb the additional volumes, leading to surplus material and rising inventories on both the LME and SHFE. Weak macroeconomic conditions in Europe and Turkiye further capped demand, while NPI prices slid to a five-year low by year-end. Despite higher nickel ore costs, downstream demand remained insufficient to support prices.
MHP expansion clouds 2026 outlook
Looking ahead, Indonesia’s expanding nickel hydroxide mixture (MHP) capacity between 2025 and 2027 is expected to add further downside risk. Stainless steel demand faces limited short-term upside due to the ongoing property sector slowdown, while the commercial rollout of high-nickel EV batteries remains gradual. Analysts predict LME nickel prices in a wide range of $13,000-20,000/t in 2026.
Policy risks and supply rationalisation remain key
Market participants highlighted Indonesia’s mining quota (RKAB) policy as a key variable. Tighter quotas could temporarily ease supply pressure, while prolonged low prices may force high-cost, non-integrated producers to exit. In the near term, the nickel market is likely to remain volatile, with prices struggling to establish a durable floor.
Note: This article has been written in accordance with a content exchange agreement between SteelDaily and BigMint
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