- Mine disruptions, Indonesian output curbs slow supply expansion
- Demand growth driven by stainless steel, battery applications
JapanMetalDaily: The global nickel market is expected to remain in surplus in 2026, though the excess is projected to narrow significantly as supply growth slows amid policy curbs and operational disruptions.
Supply growth moderates despite Indonesian dominance
Global nickel supply is forecast at 3.83 million tonnes (mnt) in 2026, up marginally by 0.5% y-o-y, while demand is expected to grow at a faster pace of 3.2% to 3.66 mnt. The resulting surplus is estimated at 173,000 t, down sharply from 268,000 t in 2025.
Indonesia continues to anchor global supply, with nickel pig iron (NPI) output projected to rise modestly, while China’s production is expected to decline. However, tighter ore quotas in Indonesia and disruptions across multiple global mining and smelting operations have slowed overall supply expansion.
Intermediate supply tightens; battery demand rises
Reduced availability of intermediate products, particularly from Indonesia, is expected to impact downstream refined nickel output. A portion of these materials is increasingly being diverted toward battery applications, limiting supply for traditional markets.
On the demand side, stainless steel production is projected to grow steadily, supported by China, while battery demand is expected to rise further, driven by electric vehicle adoption. However, the dominance of lithium iron phosphate (LFP) batteries continues to moderate nickel intensity growth.
Outlook
Market participants indicated that continued ore supply controls in Indonesia could accelerate the shift towards a tighter market balance in the medium term. Additionally, rising sulphur costs linked to energy market disruptions may further elevate processing costs, particularly for high-pressure acid leaching (HPAL) operations.
Note: This article has been written in accordance with a content exchange agreement between Japan Metal Daily and BigMint.
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