- Surplus expected to narrow from CY’25
- Indonesian NPI output falls 2.3%
Sumitomo Metal Mining expects the global nickel market to remain in a slight surplus in 2026 and 2027, with the balance projected at 38,000 t and 34,000 t, respectively. The surplus is expected to narrow significantly from 268,000 t in 2025, reflecting lower supply growth and stronger demand.
2026 supply to decline for first time since 2015
Global nickel supply is forecast at 3.739 mnt in 2026, down 2% y-o-y, while consumption is expected to rise 4.3% to 3.701 mnt. The projected surplus has narrowed from the earlier estimate of 173,000 t issued in March.
The decline in supply would mark the first annual reduction since 2015, mainly due to lower Indonesian production. Indonesia’s NPI output is forecast at 1.68 mnt, down 2.3% y-o-y, as government restrictions on nickel ore production quotas weigh on raw material availability. The status of additional quotas applied for in July remains uncertain.
China’s NPI production is forecast at 330,000 t, up 10% y-o-y. However, Chinese nickel cathode production is expected to decline as higher sulfur and sulfuric acid prices have constrained HPAL operations in Indonesia, reducing the availability of MHP feedstock.
Stainless steel and battery demand remain strong
Global stainless crude steel production is forecast at 67.381 mnt in 2026, up 5.1% y-o-y, with China’s output expected to increase 5.9% to 43.266 mnt.
Nickel demand from batteries is forecast to increase by 30,000 t to 560,000 t. Strong demand is also expected from special steels, energy-related applications and AI/data-centre infrastructure, supporting overall nickel consumption.
Nickel surplus to remain narrow in 2027
For 2027, global nickel supply is projected to increase 5.8% y-o-y to 3.957 mnt, while consumption is expected to rise 6% to 3.923 million t, resulting in a surplus of around 34,000 t.
Indonesia’s NPI production is forecast to recover to 1.88 mnt, up 11.9% y-o-y, while China’s NPI output is expected to remain unchanged at 330,000 t.
Global stainless crude steel production is forecast at 70.86 mnt in 2027, up 5.2% y-o-y, with China’s production rising 5.4% to 45.596 mnt. Battery-related nickel demand is expected to increase by 60,000 t to 620,000 t.
Outlook
Sumitomo Metal Mining expects China’s nickel cathode production to partially recover as sulfur and sulfuric acid prices stabilise. However, strong battery-sector demand for MHP could continue to limit the recovery in cathode production.
Indonesia’s 2027 nickel ore quota remains uncertain. While producer requests to the government are expected to prevent a repeat of the sharp tightening seen in early 2026, Sumitomo does not anticipate a significant increase in production quotas.
Overall, the global nickel market is expected to remain broadly balanced in 2026-27, with stronger stainless steel and battery demand offsetting much of the expected supply recovery.
Leave a Reply