Nickel prices have fallen below $15,300 per tonne, reaching their lowest level since December 2025 as expectations of a global supply surplus continue to pressure the market. The International Nickel Study Group (INSG) has revised its 2026 outlook from a 32,000-tonne deficit to a 19,000-tonne surplus and expects the excess to widen to 70,000 tonnes in 2027.

Rising Indonesian nickel ore imports from the Philippines are adding to supply availability, helping domestic smelters secure feedstock and cushioning the impact of production restrictions. However, the outlook is not entirely bearish, as Indonesia’s nickel smelter association expects domestic nickel product output to decline this year amid raw-material shortages, higher ore prices, water constraints and power allocation changes.

Market Snapshot

• Nickel price: Below $15,300 per tonne.
• Price trend: Lowest level since December 2025.
• 2026 global balance: Revised from a 32,000-tonne deficit to a 19,000-tonne surplus.
• 2027 surplus forecast: 70,000 tonnes.
• Indonesian nickel ore imports from the Philippines: Up 65.75% year-on-year to 13.52 million tonnes during January–August 2026.
• Indonesian nickel product output: Forecast to decline by 3.5%–4% in 2026.

Nickel Price Action: Surplus Expectations Drive Selling Pressure

Nickel has fallen below $15,300 per tonne as the prospect of excess global supply continues to weigh on sentiment. The latest revision to the INSG’s market balance reinforces concerns that available production could exceed demand in both 2026 and 2027.

The shift from a projected deficit to a surplus represents a meaningful change in the market outlook. The expected surplus of 70,000 tonnes in 2027 suggests that the imbalance could widen, potentially limiting the scope for a sustained price recovery unless demand strengthens or production growth slows.

With prices now at their lowest level since December 2025, traders will be monitoring whether surplus expectations continue to dominate market sentiment or whether emerging supply constraints provide a floor.

Global Nickel Supply: Surplus Forecast Expands

The INSG’s revised outlook places global supply conditions at the centre of the nickel market.

The organisation now anticipates a 19,000-tonne surplus in 2026, compared with its previous forecast of a 32,000-tonne deficit. For 2027, the expected surplus rises to 70,000 tonnes.

If these projections are realised, the market could remain under pressure as producers compete to supply available demand. A persistent surplus may also reduce the urgency for buyers to secure material, particularly if inventories increase.

However, the forecasts remain subject to changes in production, consumption and operational conditions. Any significant reduction in output or improvement in demand could alter the expected balance.

Indonesia’s Nickel Ore Imports: Philippine Supply Supports Smelters

Indonesia’s imports of nickel ore from the Philippines increased by 65.75% year-on-year to 13.52 million tonnes during the first eight months of 2026.

The additional ore supply is helping Indonesian smelters secure the raw materials required for production. It is also cushioning the effects of domestic production restrictions by providing an alternative source of feedstock.

This development adds complexity to the global supply outlook. Although operational constraints may limit some Indonesian output, greater access to imported ore could help smelters maintain production and prevent supply restrictions from translating into a more significant global shortage.

The pace of Philippine ore shipments and the ability of Indonesian smelters to process the additional material will remain important indicators for future price direction.

Indonesian Smelter Output: Production Constraints Provide a Counterweight

Despite increased ore imports, Indonesia’s nickel smelter association forecasts a 3.5%–4% decline in domestic nickel product output this year.

The association cites several pressures, including raw-material shortages, higher ore prices, drought-related water constraints and some smelters redirecting electricity towards aluminium production.

These challenges could restrict the extent to which Indonesian producers increase finished nickel output. If the anticipated decline materialises, it may partially offset the bearish implications of the projected global surplus.

Nevertheless, the effect on prices will depend on the scale of the production reduction relative to global supply and demand. A modest decline in Indonesian output may not be sufficient to eliminate the surplus projected for 2026 and 2027.

Bullish Scenario

Nickel could stabilise or recover if Indonesian production constraints prove more severe than expected, ore availability deteriorates or global demand improves. Water shortages, higher input costs and power allocation changes could limit smelter output, reducing the amount of refined nickel reaching the market.

A smaller-than-forecast global surplus could also encourage buyers to reassess the downside outlook, particularly if prices have already incorporated much of the expected oversupply.

Bearish Scenario

Further downside remains possible if global production continues to exceed consumption and the INSG’s projected surplus widens as anticipated. Increased Philippine ore shipments to Indonesia could support smelter operations, helping maintain supply despite domestic constraints.

If the expected 70,000-tonne surplus for 2027 becomes more firmly established, market sentiment could remain weak. A sustained recovery would then require stronger demand, lower production or other evidence that the global balance is tightening.

Nickel Price Forecast: Oversupply Remains the Key Risk

The near-term outlook for nickel remains cautious as prices fall below $15,300 per tonne. The revised INSG forecasts suggest that oversupply is becoming a more significant concern, with the projected market balance shifting from a deficit in 2026 to surpluses in both 2026 and 2027.

Indonesia remains central to the outlook. Increased ore imports from the Philippines are supporting smelter feedstock availability, while water constraints, higher ore costs and power allocation changes are expected to weigh on domestic product output.

The key question is whether Indonesian production constraints will be sufficient to offset the broader global surplus. Unless supply expectations improve or demand strengthens, nickel may remain vulnerable to further selling pressure. Conversely, evidence of a tighter-than-expected physical market could help prices stabilise.

Market Outlook: What to Watch Next

• INSG forecasts: Any further revisions to the 2026 and 2027 global nickel balance.
• Indonesian output: Whether the projected 3.5%–4% decline in domestic nickel product production materialises.
• Philippine ore shipments: Whether Indonesia’s increased imports continue to support smelter operations.
• Raw-material costs: Changes in ore prices and availability affecting production economics.
• Water and power constraints: Whether operational restrictions intensify or ease across Indonesian smelters.
• Global demand: Evidence that consumption is improving enough to absorb the projected surplus.

Currency Hedger View

Nickel price volatility can affect industrial manufacturers, metal processors and businesses involved in international raw-material procurement. For companies purchasing nickel across borders, commodity prices and exchange rates can jointly influence landed costs, payment requirements and profit margins.

Businesses with international supply chains should assess commodity exposure alongside the currencies used to settle supplier invoices. Monitoring both factors can help companies evaluate cost risks and plan cross-border payments more effectively.

Currency Hedger monitors foreign exchange markets alongside broader commodity and macroeconomic conditions, helping businesses assess and manage their international currency exposure.

Open a Currency Hedger Account

Visit Currency Hedger or explore the website at currencyhedger.com.

Analysis: Louis Roche, Today Markets

Disclaimer: This article is for informational and educational purposes only and does not constitute investment, trading or financial advice. Commodity markets are volatile, and forecasts are conditional rather than guaranteed. Always conduct independent research and consider the risks before making financial decisions.