2026 Nickel Market: Why Prices Keep Falling Short

What’s driving nickel valuations right now? A massive supply glut combined with cooling demand has left investors wondering how much is a nickel worth in today’s market. Trading hovered around US$15,000 per metric ton throughout 2025, with little momentum to suggest a breakout is coming anytime soon.

The Demand Side: Where’s the Growth?

The real problem isn’t just oversupply—it’s that nobody seems eager to buy. Stainless steel, which accounts for over 60% of global nickel consumption, is heavily tied to China’s construction sector. But China’s property market remains in freefall. November 2025 sales dropped 36% year-over-year, and through the first 11 months, the decline hit 19%. Without a recovery in Chinese housing, stainless steel demand will stay sluggish.

The EV story is even more complicated. Battery manufacturers like Contemporary Amperex Technology have shifted toward lithium-iron-phosphate (LFP) chemistry, which offers comparable range at lower cost and greater safety. While nickel-manganese-cobalt batteries dominated earlier, recent LFP advances now deliver 750+ kilometer ranges. In September 2025, LFP battery demand jumped 7% year-on-year, while nickel battery demand rose just 1%.

Policy headwinds are making this worse. The US eliminated its EV tax credit in September 2025, triggering a 46% drop in Q4 EV sales compared to Q3. Ford Motor scaled back EV production with a US$19.5 billion writedown, pivoting to hybrid vehicles. The EU also scrapped its 2035 internal combustion engine ban. These moves signal weakening energy transition momentum globally.

The Supply Puzzle: Indonesia’s Dilemma

Indonesia controls global nickel supply, producing 2.2 million metric tons in 2024—nearly triple the 800,000 MT from 2019. The government raised quotas in February 2025, pushing nickel ore output to 298.5 million wet metric tons from 271 million WMT in 2024.

The result? Exchange warehouses are stuffed. LME stockpiles hit 254,364 MT by late November 2025, up from 164,028 MT at the start of the year. Prices collapsed to US$14,295, approaching the floor of profitability for low-cost Indonesian miners.

This sparked speculation about production cuts. Indonesia is discussing reducing nickel ore output to around 250 million MT in 2026—down sharply from 379 million WMT in 2025. However, discussions are still ongoing and nothing is finalized. Additionally, two policy shifts introduced in 2025 may influence future supply: a dynamic royalty rate (14-18% based on prices) and mining licenses now valid for only one year instead of three.

Still, analysts expect the global market to remain in surplus by around 261,000 MT in 2026. Without coordinated, deep cuts across multiple producers, prices are unlikely to spike.

What’s the 2026 Outlook?

Forecasters remain bearish. ING’s commodities strategist expects nickel to average US$15,250 in 2026, with prices struggling to hold above US$16,000. The World Bank projects US$15,500 for 2026, rising to US$16,000 in 2027. Russia’s Nornickel anticipates a 275,000 MT surplus of refined nickel next year.

For how much is a nickel worth to significantly improve, the market would need either unexpected supply disruptions or strikingly stronger demand—neither looks probable. Energy transition policy reversals and China’s persistent housing weakness remain major headwinds. Without a fundamental shift, nickel investors face a prolonged period of subdued valuations.