- Prices slip from recent highs as persistent surplus continues
- Vale’s nickel output rises 11% in CY’25 on Onca Puma expansion
LME nickel prices averaged $17,050/tonne (t) in the week ended 6 February, slipping 4% from $17,700/t in the prior week. The pullback followed a brief climb to an 18-month high earlier in the month.
Initial upside stemmed from worries over Indonesia’s nickel ore supply policies, but momentum fizzled as robust global supply and swelling exchange stocks capped gains.
Overall, LME-monitored nickel inventories edged lower to 285,282 t, down 1.5% from 286,284 t a week earlier.
Market updates
Nickel market oversupply to persist in 2026
The global nickel market is set to remain oversupplied in 2026, with a surplus estimated at about 270,000 t as Indonesian NPI and MHP capacity expansions outpace weak demand. Stainless steel consumption is subdued due to real estate slowdowns, while EV battery demand growth remains gradual. Rising exchange inventories reflect the imbalance, keeping prices under pressure. Nickel prices are likely to stay volatile within a broad range as abundant supply caps any strong upward momentum with Indonesian mining quotas and potential high-cost production cuts seen as key market-balancing factors.
Canada Nickel advances Ontario project despite challenging market conditions
Canada Nickel is progressing the development of its Crawford Nickel Sulphide Project in Ontario despite a softer global nickel price environment driven by Indonesian supply growth and slower battery demand. The company is focused on building a large-scale, low-cost operation positioned to remain competitive across price cycles. With strong government support, advancing permits, and a financing strategy in place, Canada Nickel aims to supply secure, low-carbon Class 1 nickel to Western markets as long-term demand from electrification and supply chain diversification strengthens.
Vale boosts nickel output on Onca Puma expansion
Vale’s nickel production rose to 177,200 t in 2025, up 10.8% y-o-y and above its 160,000-175,000 t guidance, marking its strongest result since 2022. Growth was driven by Brazil’s Onca Puma mine, where a second furnace reached full capacity, lifting fourth-quarter output to more than double a year earlier. This increase helped offset weaker performance at Sudbury and Thompson in Canada. Vale expects further gains in 2026, targeting 175,000-200,000 t.
Outlook
Nickel prices are likely to remain under pressure, with any rallies capped by surplus supply unless meaningful production discipline emerges.
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