Nickel Price Forecast 2026: Why The Market Remains Stuck in a Bearish Grip

The nickel price forecast for 2026 looks bleak. After stagnating around US$15,000 per metric ton throughout 2025, the metal faces a confluence of structural challenges that analysts believe will keep it pinned near these depressed levels. According to ING’s commodities strategist Ewa Manthey, prices will likely struggle to hold above US$16,000, with an average projection of US$15,250 for the year — a stark contrast to the US$20,000+ levels needed to support western mining operations.

The Supply Glut That Won’t Go Away

At the heart of nickel’s struggle lies a persistent oversupply problem originating from Indonesia, which produces more nickel than the rest of the world combined. The numbers paint a sobering picture: Indonesian nickel production surged from 800,000 MT in 2019 to 2.2 million MT in 2024 — nearly a threefold increase that has fundamentally altered market dynamics.

The influx continued into 2025. In February, Indonesia adjusted its ore output quota from 271 million wet metric tons to 298.5 million WMT, ostensibly to “reduce supply pressures” — a move that had the opposite effect. By November 2025, stockpiles at the London Metal Exchange had ballooned to 254,364 MT, up sharply from 164,028 MT at the year’s start. This accumulation forced the nickel price to sink toward US$14,295, compressing margins for even the lowest-cost Indonesian smelters.

Rumors of potential production cuts in 2026 — with the Indonesian government reportedly considering a reduction to around 250 million MT — offer little comfort. Manthey stressed that without coordinated, dramatic action across the industry, such cuts remain unlikely to meaningfully alter fundamentals. “The global market is still forecast to remain in surplus — around 261,000 MT in 2026,” she noted. Russia’s Nornickel independently projects an even larger surplus of 275,000 MT of refined nickel, suggesting years of pressure ahead.

Demand Headwinds Compound the Problem

Supply excess would be manageable if demand were robust, but it isn’t. Nickel’s primary outlet — stainless steel production — depends heavily on China’s construction sector, which has been in freefall. Despite government intervention efforts in 2024 and 2025, Chinese property sales fell 36 percent year-on-year in November 2025 alone, with overall sales down 19 percent through the first 11 months. Since stainless steel accounts for over 60 percent of global nickel consumption, this stagnation directly suppresses prices.

The hoped-for savior — the electric vehicle battery market — is also faltering. For years, rising nickel demand was fueled by expectations that nickel-manganese-cobalt batteries would dominate EV production due to superior energy density and range. But lithium-iron-phosphate (LFP) chemistry has rapidly closed the gap. Modern LFP batteries now achieve over 750-kilometer ranges while remaining cheaper and safer. Battery makers like Contemporary Amperex Technology have pivoted accordingly, with LFP demand rising 7 percent year-on-year in September 2025, compared to just 1 percent growth for nickel-based chemistries.

Policy reversals have exacerbated weakness in the EV sector. The U.S. eliminated its EV tax credit in September 2025, triggering a 46 percent collapse in Q4 EV sales compared to Q3. Ford responded by taking a US$19.5 billion writedown and scaling back its EV ambitions in favor of hybrid vehicles. The European Union dropped its 2035 internal combustion engine ban. These shifts signal slowing energy transition momentum, directly weighing on battery metal demand including nickel.

The Nickel Price Forecast: A Range-Bound Year

Analysts universally see limited upside for the nickel price forecast in 2026. The World Bank projects prices averaging US$15,500, rising modestly to US$16,000 in 2027. ING expects prices to average US$15,250, with sustained levels above US$19,000 looking “unlikely under current fundamentals.” For supply to tighten enough to drive meaningful price appreciation, either unexpected disruptions must occur or demand growth must accelerate significantly beyond consensus forecasts — both low-probability scenarios.

The Indonesian government’s new policy framework — shifting from flat 10 percent royalties to a dynamic 14-18 percent rate depending on nickel prices, and reducing mining license validity from three to one year — adds regulatory uncertainty but likely won’t shift the supply-demand equation in 2026. What it does do is give Jakarta greater flexibility to manage production as prices evolve, though analysts suggest the government will hold off on aggressive cuts while monitoring whether new policies stabilize the market.

Until either Indonesian supply contracts meaningfully or global nickel demand rebounds — prospects that appear distant under current trajectories — the nickel price forecast for 2026 remains one of constraint and opportunity primarily for those betting on further downside. For producers and bulls, the outlook demands patience.