Nickel shortage forecast flips to surplus
The International Nickel Study Group forecasts a global nickel surplus of 19,000 tonnes in 2026, reversing an earlier shortage prediction. Supply is expected to exceed demand due to increased production, particularly from Indonesia. Nickel's role in batteries is growing slower than anticipated, facing competition from lithium iron phosphate chemistries. Key producers like Vale, Glencore, and BHP are mentioned, with BHP reviewing its suspended nickel assets.
How this was made
The 30-second read
Why it matters
The surplus forecast suggests lower nickel prices, impacting miners and downstream users.
Market read
The new surplus outlook could depress nickel prices, affecting miners, battery manufacturers, and stainless steel producers.
What to watch
Potential supply disruptions in Indonesia or new environmental regulations could tighten future supply.
Background
The International Nickel Study Group released its October outlook showing a shift from a projected shortage to a modest surplus for 2026.
Ticker impact
Vale reported 10,400 tonnes of finished nickel in Q2, up 1,800 tonnes YoY, indicating higher output.
likely pressure as market prices in the surplus outlook
Higher output from a major producer may mitigate price declines but overall surplus dominates.
BHP's Western Australia nickel assets are suspended; the company plans to sell its Kambalda concentrator.
likely pressure on BHP's nickel segment valuation
Reduced production and asset divestiture amid surplus reduces future revenue from nickel.
Market effects
Nickel surplus may pressure battery and stainless steel sectors reliant on the metal.
Indonesia's reduced quota and Chinese project expansions influence Asian supply dynamics.
Global nickel price outlook may soften, affecting EV battery cost assumptions.
Counterpoint
If demand for EV batteries accelerates faster than forecast, the surplus could be quickly absorbed.
Key entities
- organizationInternational Nickel Study Group
Intergovernmental body providing nickel market forecasts.
- companyVale
Brazilian miner reporting increased nickel production.
- companyBHP
Global miner with suspended WA nickel assets and a planned asset sale.
