Global Nickel Outlook as the Market Swings Back to Surplus
The International Nickel Study Group now forecasts a nickel surplus for 2026 and a larger one for 2027. Indonesia has lifted its ore quota, and the nickel price has given back most of its early-year rally. The surplus is small, at about half of one per cent of usage, and usage is still growing.
The global nickel outlook has changed since Samso's review of 20 October, Gold Fields Buys Into Kambalda, a Review of the Nickel Market in 2026, which used prices to 8 October. The industry forecast has moved to a surplus, Indonesia has allowed more ore to be mined and the price has set a new low for 2026.
All prices in this piece are as at the close of ASX trading on 21 October 2026. The nickel price is the London Metal Exchange (LME) cash settlement of 20 October 2026, the latest available at that time.
What has changed in the nickel market since 8 October
The International Nickel Study Group (INSG) now expects a surplus in 2026. After its October meeting in Lisbon it forecast production of primary nickel at 3.87 million tonnes and usage at 3.85 million tonnes, a surplus of 19,000 tonnes [R1]. In April it had forecast a deficit of 32,000 tonnes [R2].
Indonesia has also allowed more ore to be mined. Shanghai Metals Market reported on 16 October that the energy ministry has approved a revised 2026 ore quota of about 290 million tonnes [R3]. The quota, known as the RKAB, caps the ore each mine may dig. It was set at 260 to 270 million tonnes in February, against 379 million tonnes approved for 2025 [R4].
The price has also fallen. LME nickel settled at US$14,885 a tonne on 15 October 2026, its lowest close of 2026, and was US$15,350 on 20 October 2026 [R5]. Together these point to a looser market than the one expected in April.
What the nickel price chart shows
FIG. 01 charts the daily LME cash price since January 2025. From US$14,125 a tonne on 16 December 2025 the price rose 38 per cent to US$19,450 on 6 May 2026. Argus tied the rise, which began in December, partly to Indonesia's plan to cut ore supply, and the lower quota was confirmed on 10 February [R6][R4]. Since May the price has fallen 21 per cent, giving back 77 per cent of the rally on Samso's arithmetic.
The price crossed above its 200-day moving average in late December 2025 and stayed there until late June. It then moved back and forth across it until 6 August 2026, and has been below it since. It is now 10.8 per cent under it, at US$17,205. On 14 August 2026 the 50-day average fell below the 200-day, the pattern traders call a death cross. We read these lines as a description of the trend, not a forecast.
The 14-day Relative Strength Index fell to 25 on 15 October 2026, below the 30 level usually read as oversold, and has recovered to 40 since. The 15 October 2026 close of US$14,885 matched the close of 22 December 2025, a week into the rally. In plain terms, the chart turned from an uptrend into a downtrend over the middle of 2026, and the price is now about 9 per cent above where the rally began.
Exchange stocks give a similar picture (FIG. 02). Nickel in LME warehouses was 280,866 tonnes on 20 October 2026, 73 per cent more than at the start of 2025 [R5]. Stocks eased from 289,506 tonnes in February to 264,444 tonnes in August, and have risen again since mid-August. Rising stocks alongside a falling price fit the move to a surplus.
Why Indonesia's quota is setting the nickel price
FIG. 03 shows the INSG balance. In April the group put the 2025 surplus at 283,000 tonnes [R2], and its 2026 forecast moved from deficit to surplus in six months. Usage is now forecast 7.6 per cent higher than in 2025, and the group expects stainless steel output to keep growing [R1]. The group said battery use has grown more slowly than expected. Lithium iron phosphate batteries, which carry no nickel, are taking share [R1].
Through 2026 the nickel price has followed Indonesian policy. Indonesia mined about two thirds of the world's nickel in 2025 [R7]. The rally came on a lower quota. Smelters then covered part of the gap with ore from the Philippines [R8], and the quota has since been revised up. At about 290 million tonnes it is still about a quarter below the 379 million tonnes approved for 2025 [R3][R4]. So the quota is still tighter than in 2025, but looser than the market priced in early 2026.
What comes next for the nickel market
The next marker is Indonesia's quota for 2027, with applications closing on 15 November [R1]. The INSG's 70,000 tonne surplus for 2027 has production rising to 4.07 million tonnes against usage of 4.00 million tonnes. Indonesia's 2027 quota will go a long way to deciding whether that surplus arrives.
In Australia, BHP will review the suspension of its Western Australian nickel business by February 2027, with a restart among the options [R9].
THE OTHER WAY TO READ THIS The 19,000 tonne surplus is about half of one per cent of forecast 2026 usage, on Samso's arithmetic, and the April deficit of 32,000 tonnes was under one per cent [R1][R2]. Usage is still growing. A tight 2027 quota or a supply disruption could move the balance back to a deficit. |
Samso Concluding Comments
The October numbers show a nickel market that has loosened through 2026, and no resurgence yet. The 2026 rally followed a cut to Indonesia's ore quota. Most of it has been given back. In that time Philippine ore covered part of the gap and the quota was later revised up. Demand is still growing, and the price is being set more by Indonesian policy than by that demand.
SAMSO TAKE On 20 October we said the nickel price had become a policy price set in Jakarta. The October data supports that view. For ASX investors with nickel exposure, the 2027 quota is likely to move the price more than demand will. Will Indonesia hold its 2027 quota close to this year's level, or let it grow back towards 2025? |
Previous Samso Coverage of the Nickel Market
20 OCTOBER 2026
The Samso Insight on BHP's sale of the Kambalda concentrator, with the nickel price, Indonesia's quota, Australian operations and eleven ASX companies with nickel assets, to 8 October 2026.
28 SEPTEMBER 2018
An earlier Samso Insight on ASX nickel stocks, from the previous nickel cycle.
References and sources
Each source carries a number in square brackets, such as [R1], which appears in the text where the source is used. The figures in this piece are original Samso illustrations of the sourced data named in each caption. Where the text uses Samso's arithmetic, it says so.
Cover photo. Loading of nickel ore from narrow gauge wagons on the pier onto ships, Thio, New Caledonia, 30 June 1909, unknown photographer. Public domain, via Wikimedia Commons.
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