What's Next for Nickel Price in 2026? Market Faces a Critical Crossroads

The nickel price puzzle entering 2026 boils down to one thing: can the market finally shake off its surplus? For most of 2025, nickel was trading in a narrow band around US$15,000 per metric ton—stuck in a holding pattern that reflected deeper structural challenges. The metal that was supposed to be the battery metal of the future now finds itself caught between opposing forces: massive supply flows from Indonesia clashing with weakening global demand.

The Indonesian Supply Squeeze Nobody Expected

When Indonesia ramped up its nickel ore output quota to 298.5 million wet metric tons (WMT) in February 2025, few predicted the extent of the supply buildup that would follow. That represented a spike from 271 million WMT the previous year—a bold move that was supposed to help ease supply tensions.

The opposite happened. By year-end, nickel stockpiles at the London Metal Exchange had ballooned to 254,364 MT, nearly double the 164,028 MT sitting in warehouses at the start of 2025. This inventory surge sent nickel price crashing toward US$14,295—dangerously close to the floor where Indonesian low-cost miners start running unprofitable operations.

Here’s where it gets interesting: Indonesia produced a staggering 2.2 million MT of nickel in 2024, compared to just 800,000 MT in 2019. That’s a 175% increase in five years. The nation now dominates global nickel production, and its output decisions essentially set the price floor for the world.

Facing mounting losses, Indonesian officials have reportedly proposed cutting nickel ore output to around 250 million MT in 2026—a significant pullback from 2025’s 379 million WMT total. However, these discussions remain preliminary. Ewa Manthey, commodities strategist at ING, cautioned that “the global market is still forecast to remain in surplus—around 261,000 MT in 2026—so further cuts would need to be significant to alter fundamentals.”

Translation: minor trims won’t fix the problem. The nickel market needs dramatic action from multiple producers to rebalance.

Why Demand Can’t Save the Nickel Price

While supply overwhelms the market, the demand side presents its own headwinds. Stainless steel consumption—which accounts for over 60% of global nickel usage—depends heavily on Chinese property construction. That sector remains in freefall. November 2025 saw sales plunge 36% year-over-year in China, with the cumulative nine-month decline hitting 19%.

The Chinese government’s attempts to stabilize housing in 2024 and early 2025 produced little sustained improvement. Without a genuine property recovery, stainless steel demand will struggle—and that directly undermines nickel price support.

The bigger shock came from the EV market, where nickel’s fortunes turned unexpectedly. Battery makers like Contemporary Amperex Technology (SZSE:300750, HKEX:3750) have been shifting away from nickel-manganese-cobalt chemistry toward lithium-iron-phosphate (LFP) batteries. While nickel batteries were once prized for superior energy density and range, recent LFP advances have erased that advantage. Modern LFP vehicles now achieve ranges exceeding 750 kilometers while offering cheaper production costs and improved safety—making them the preferred choice in price-sensitive markets.

The numbers tell the story: nickel battery demand rose just 1% year-on-year in September 2025, while LFP battery demand jumped 7%. More damaging for nickel watchers, US EV sales collapsed 46% in Q4 compared to Q3, with the expiration of the US$7,500 tax credit in September crushing demand. Ford Motor (NASDAQ:F) scaled back EV investments with a US$19.5 billion writedown, while the EU scrapped its 2035 internal combustion engine ban.

These policy reversals are devastating for battery metal optimists. “Any slowdown in energy transition policies adds to bearish sentiment for battery metals, including nickel,” Manthey noted.

What Happens to Nickel Price in 2026?

The consensus among analysts points downward. ING’s Manthey expects the nickel price to remain under pressure, struggling to hold above US$16,000 given persistent surplus conditions. Her forecast: an average nickel price of US$15,250 in 2026, with sustained levels above US$19,000 appearing unlikely under current market dynamics.

The World Bank arrived at a similar conclusion, projecting a 2026 nickel price of US$15,500, rising modestly to US$16,000 in 2027. Russia’s Nornickel—one of the world’s largest nickel producers—forecasts a refined nickel surplus of 275,000 MT in 2026, further cementing oversupply concerns.

For prices to rally meaningfully, the market would need either unexpected supply disruptions or dramatically stronger-than-anticipated stainless steel and battery demand. Neither appears likely in the near term.

The Bottom Line

Until fundamental market conditions shift—whether through coordinated production cuts, a Chinese property recovery, or a surprise resurgence in energy transition policies—the nickel price outlook remains subdued. The metal that captivated investors as the EV era’s essential commodity has instead become a cautionary tale about supply overshoot and shifting demand dynamics. For nickel producers and investors, 2026 promises to be another year of patience over profits.