Nickel Plunges Amid Negative Price Outlook for 2026: Oversupply and Weak Demand Weigh Heavily

October 15, 2025 – The global nickel market is navigating a challenging period, marked by significant price declines and a negative outlook extending into 2026. This downturn is primarily driven by a persistent supply surplus, particularly from Indonesia, coupled with softer demand from key industrial sectors like stainless steel and electric vehicle (EV) batteries. This is a critical signal that investors, managers, and technical experts in the industry must closely monitor to adjust their strategies accordingly.

Recent Nickel Price Movements and Forecasts

Nickel prices have continued their downward trend through 2025, fluctuating around $15,000 to $16,000/tonne. Specifically, on October 14, 2025, nickel prices fell to approximately $15,105/tonne, a 0.49% decrease from the previous day and a 13.47% drop over the past month. Analysts at Goldman Sachs project an even more bearish outlook, expecting nickel prices to fall by another 6% to around $14,500 per metric ton by December 2026.

This decline is not merely short-term volatility but reflects a deeper structural imbalance between supply and demand in the global market.

Supply-Side Factors: Indonesia's Overwhelming Role

The primary cause of the global nickel surplus is the aggressive increase in production from Indonesia. As the world's largest nickel producer, Indonesia has been rapidly expanding its mining and processing capabilities, particularly for nickel pig iron (NPI) and nickel matte, at relatively low costs. This elevated output has flooded the market with nickel, continuously exerting downward price pressure.

The profit margins of Indonesian producers will be a crucial determinant of whether the pace of supply expansion moderates. If prices continue to fall significantly, it could force some higher-cost producers to cut output, thereby helping the market rebalance. However, for now, Indonesian supply remains abundant.

Demand-Side Factors: Stainless Steel and EV Batteries

In addition to the supply glut, weaker demand from key nickel-consuming industries also contributes to the negative outlook:

• Stainless Steel Industry: Nickel is a critical, indispensable alloying element in stainless steel production, especially for Austenitic grades. Lower nickel prices reduce raw material costs for stainless steel producers, which could stimulate production. However, global stainless steel demand is facing challenges from economic slowdowns in some regions, trade tensions, and a deceleration in the construction sector, preventing the industry from absorbing the excess nickel supply.

• Electric Vehicle (EV) Battery Sector: Nickel plays a vital role in many lithium-ion EV battery chemistries, particularly high-energy-density NMC (nickel-manganese-cobalt) types. However, demand from this sector is slowing due to several factors:
• Slowing EV Adoption: The growth rate of EV sales has decelerated in some major markets, partly due to policy changes (e.g., the expiration of US federal EV tax credits in late 2024) and increased EV costs.
• Battery Chemistry Shifts: Some battery manufacturers are shifting towards lower nickel content batteries or alternative chemistries like LFP (lithium iron phosphate), especially for mass-market EV models. This shift could further reduce the growth rate of nickel demand from the EV battery industry.

Market Outlook and Other Forecasts

The nickel market is expected to remain in a pronounced surplus through 2026 and possibly beyond. Analysts from various reputable institutions offer cautious forecasts:

• UBS and Wood Mackenzie suggest the market will only reach structural balance around 2030, when supply growth slows and EV-driven demand accelerates.
• Investing News Network also forecasts a nickel market surplus of 198,000 tonnes in 2025, lowering its average price forecast to $15,730/tonne.
• Capital.com and Devere Group also provide average forecasts for 2025 ranging around $15,400-$16,000/tonne, with a predominant bearish trend.

Furthermore, a strong US dollar and tariff risks have also contributed to reduced demand and pricing pressure on nickel. While short-lived price rallies could occur due to potential supply disruptions or policy shifts, a sustained price recovery depends on major market changes, particularly a moderation of Indonesian supply and a renewed acceleration of EV demand.

Implications for Industry Professionals

• Investors: Should exercise caution with nickel investments in the short term. Focus on nickel mining and processing companies with low production costs, diversification capabilities, or strong positions in next-generation EV battery supply chains.
• Managers: Need to optimize production costs, manage inventories efficiently, and seek niche markets or new applications for nickel. Investing in more efficient and sustainable production technologies is also a priority to maintain competitiveness.
• Technical Experts: Play a crucial role in researching and developing alternative material solutions or optimizing nickel usage in existing applications, particularly in EV batteries and stainless steel. The development of efficient nickel recycling methods will also become increasingly important.

Conclusion

The nickel market is facing a challenging period due to persistent oversupply from Indonesia and subdued demand from key industrial sectors. The negative outlook is expected to extend into 2026, with a sustainable recovery likely only towards the end of the decade when supply and demand find a new equilibrium. Industry stakeholders must prepare for a lower price environment and focus on efficiency and innovation to navigate this challenging phase.

References:

• Economies.com
• Goldman Sachs
• Investing News Network
• Nasdaq
• Capital.com
• Carboncredits.com
• Devere Group
• UBS
• Wood Mackenzie
• Perplexity AI