- Global supply likely to be at 3.83 mnt in 2026
- Indonesian output growth slows amid ore curbs
Japan Metal Daily: The global nickel market is projected to remain in surplus in 2026, though the imbalance is expected to narrow significantly, according to Sumitomo Metal Mining. The surplus is forecast at 173,000 tonnes (t), down from an estimated 268,000 t in 2025, reflecting slower supply growth amid tightening raw material availability.
Supply growth slows on Indonesia policy impact
Global nickel supply is estimated at 3.83 mnt in 2026, up marginally by 0.5% y-o-y, as Indonesia’s ore production curbs and operational disruptions at multiple overseas mining and smelting assets weigh on output. Indonesian nickel pig iron (NPI) production is expected to rise by only 2.2% to 1.76 mnt, indicating a slowdown from previous expansion trends, while China’s NPI output may decline by 5% to 285,000 t.
Intermediate products, including mixed hydroxide precipitate (MHP), are projected to decline, with supply from China and Indonesia falling by around 70,000 t to 420,000 t. This is largely attributed to constrained ore availability and a strategic shift of intermediates toward the battery value chain, reducing feedstock for stainless steel-linked production.
Demand supported by stainless steel and batteries
Global nickel consumption is forecast to grow 3.2% y-o-y to 3.66 mnt in 2026. Stainless steel production is expected to reach 65.45 mnt, up 1.9%, supported by steady output growth in China. Meanwhile, battery-sector demand is projected to increase by 60,000 t to 590,000 t, driven by expanding electric vehicle (EV) adoption.
Although lithium iron phosphate (LFP) batteries dominate the Chinese market, their growth share is expected to plateau, while overall EV expansion will continue to support nickel-intensive battery chemistries.
Cost pressures and raw material risks emerge
Supply-side risks are also emerging from tightening sulphur availability, a key input for high-pressure acid leach (HPAL) operations. Elevated sulphur prices, partly linked to Middle East uncertainties, may further constrain nickel intermediate production and increase cost pressures across the value chain.
Outlook
The global nickel market is expected to remain in surplus in the near term, but tightening ore supply in Indonesia and rising battery-sector demand could accelerate a shift toward deficit conditions earlier than previously anticipated.
Note: This article has been written in accordance with a content exchange agreement between Japan Metal Daily and BigMint.
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