- Indonesia’s nickel ore quotas remain key supply-side factor
- Growing stainless steel production to support nickel consumption
The International Nickel Study Group (INSG), following its meetings held on 12-13 October 2026, forecast the global primary nickel market to remain in surplus in both 2026 and 2027, although the surplus is expected to narrow significantly from 2025 levels. The group projected a surplus of 19,000 t in 2026, widening to 70,000 t in 2027, as production growth overtakes the increase in consumption.
According to INSG estimates, global primary nickel production is forecast at 3.868 million tonnes (mnt) in 2026 and 4.071 mnt in 2027. Meanwhile, primary nickel usage is projected at 3.849 mnt and 4.002 mnt, respectively.
Global nickel production, consumption outlook
World primary nickel production increased from 3.589 mnt in 2024 to 3.875 mnt in 2025. Production is forecast to edge down to 3.868 mnt in 2026 before rising to 4.071 mnt in 2027.
Primary nickel usage is expected to increase steadily, from 3.473 mnt in 2024 to 3.577 mnt in 2025, before reaching 3.849 mnt in 2026 and 4.002 mnt in 2027.
The resulting market balances indicate a surplus of 116,000 t in 2024 and 299,000 t in 2025. The surplus is projected to contract sharply to 19,000 t in 2026 before increasing to 70,000 t in 2027.
INSG cautioned that the estimates remain subject to uncertainty, particularly regarding Indonesian production levels. The production forecasts also exclude an adjustment factor for potential supply disruptions.
Indonesia’s nickel ore quotas remain key supply factor
Indonesia, the world’s largest nickel producer, approved a lower nickel ore production quota for 2026 compared with 2025 under its annual work plan and budget (RKAB) system.
The Indonesian government has stated that RKAB approvals, including revisions, take account of supply and demand conditions. Applications for 2027 RKABs can be submitted between 1 October and 15 November 2026.
Future quota approvals and production levels in Indonesia will remain important factors influencing the global nickel supply outlook, particularly given INSG’s stated uncertainty over Indonesian output.
Stainless steel demand supports nickel consumption
The World Stainless Association reported that global stainless steel melt shop production increased by 5% y-o-y in the first half of 2026. INSG expects the stainless steel sector to expand further in the second half of 2026 and throughout 2027, providing support to nickel consumption.
However, the outlook for nickel demand from the electric vehicle (EV) battery sector remains more measured. Worldwide EV sales are expected to grow only modestly in 2026, with a recovery anticipated in 2027.
INSG also noted that nickel’s role in the battery market has expanded more gradually than previously anticipated, partly due to competition from lithium iron phosphate (LFP) battery chemistries.
Global economic outlook remains uncertain
INSG noted that global economic growth in 2026 has held up better than expected and is projected to stabilise in 2027, although significant uncertainties remain.
The conflict in the Middle East has pushed up energy prices and kept inflation above target in several economies. Governments have introduced measures to cushion the impact of higher prices, while some central banks have raised interest rates to contain inflation.
Meanwhile, strong artificial intelligence (AI)-related activity continues to support investment, production and trade. Weather-related supply shocks associated with a strong El Nino could also affect certain regions.
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