Nickel Price Per Kilogram Under Pressure: What 2026 Holds for the Base Metal

Through 2025, nickel struggled to find its footing, with the metal hovering near US$15,000 per metric ton—roughly US$15 per kilogram—for most of the year. The culprit: an avalanche of supply from Indonesia combined with tepid demand from construction, manufacturing, and the EV sector. As the industry heads into 2026, a critical question emerges: will the nickel market finally find equilibrium, or will oversupply continue to weigh on per-kilogram pricing?

The answer, based on current fundamentals, suggests subdued conditions ahead. Multiple factors are converging to keep the nickel price per kilogram under sustained pressure throughout the coming year.

Indonesian Supply Surge Continues to Drive Down Per-Kilogram Prices

Indonesia’s dominance in global nickel production remains the primary headwind for the market. The nation produced 2.2 million metric tons in 2024, a stunning jump from just 800,000 MT in 2019. That explosive growth has flooded the market with nickel, preventing any meaningful price recovery per kilogram.

In early 2025, Indonesia further expanded its footprint. The government raised its nickel ore output quota to 298.5 million wet metric tons (WMT) from 271 million WMT in the prior year, citing a need to unlock production capacity while maintaining efficiency in major mining regions. The strategy backfired on prices: by late November 2025, LME warehouse stockpiles had swelled to 254,364 MT, more than double the 164,028 MT stockpile at the start of the year. Nickel per kilogram sank toward US$14,295—dangerously close to the break-even point for low-cost Indonesian producers.

The profitability squeeze has raised speculation about potential production cuts. Industry sources suggest Indonesia may cap nickel ore output near 250 million MT in 2026, down significantly from the 379 million WMT targeted in 2025. However, officials are proceeding cautiously. According to commodities strategist Ewa Manthey at ING, “The global market is still forecast to remain in surplus—around 261,000 MT in 2026—so further cuts would need to be significant to alter fundamentals.”

Adding to the complexity, Indonesia introduced new policy measures in 2025 that could influence future production decisions. A dynamic royalty system implemented in April now charges 14 to 18 percent depending on nickel prices, replacing a flat 10 percent rate. In October, mining license validity periods were cut from three to one year, giving the government tighter oversight. These changes suggest a more interventionist stance, yet they haven’t yet translated into aggressive supply reductions.

For Western nickel producers, the situation remains dire. Indonesian officials have indicated a preference for nickel prices between US$15,000 and US$18,000 per metric ton—a range that protects their own smelters but inadequately supports higher-cost operations elsewhere. Western producers began curtailing operations in 2024 when LME prices averaged US$16,812 and briefly touched US$21,000 in May. To achieve that recovery, Manthey notes that “cuts would need to be deep enough to erase most of the projected surplus. Given the scale—hundreds of thousands of MT—this seems unlikely without coordinated action.”

Demand Weakness Compounds the Supply Problem

Beyond oversupply, nickel faces a second major headwind: anemic demand growth. The metal’s largest use is in stainless steel production, much of which historically fed into China’s construction sector. The Chinese housing market, however, remains in the doldrums following its 2020 collapse. Recent government stimulus efforts have failed to reverse the slide—November 2025 housing sales plummeted 36 percent year-over-year, with cumulative declines of 19 percent through the first 11 months.

“China’s property sector weakness has weighed on stainless steel demand, which accounts for over 60 percent of global nickel consumption,” Manthey explained. “Even with broader economic growth, this stagnation has kept nickel prices subdued. A property turnaround would help, but given the surplus outlook, price upside would likely be limited.”

The EV battery sector, once touted as nickel’s growth engine, has also become a disappointment. The surge in nickel production over the past five years was largely justified by anticipated EV battery demand. Yet battery chemistry has evolved faster than anticipated. Leading producers like Contemporary Amperex Technology (CATL) have increasingly pivoted toward lithium-iron-phosphate (LFP) chemistry, abandoning nickel-manganese-cobalt (NMC) batteries that were previously seen as superior.

LFP technology has closed much of the performance gap. Vehicles using LFP now achieve ranges exceeding 750 kilometers, matching or approaching NMC capabilities. More importantly, LFP batteries are cheaper to produce and inherently safer. According to December 2025 data, nickel battery demand rose just 1 percent year-on-year in September, while LFP demand climbed 7 percent—a stark divergence that underscores the market shift.

Western EV demand has also weakened considerably. The US eliminated its EV tax credit in September 2025, triggering a dramatic demand collapse. American EV sales reached a record 1.2 million through the first nine months of 2025, heavily driven by consumers rushing to claim the US$7,500 credit before expiration. Come Q4, however, sales plummeted—down 46 percent from Q3 and 37 percent from the prior year. Ford Motor responded by scaling back its EV ambitions, taking a US$19.5 billion writedown and pivoting toward extended-range EVs and hybrids. Meanwhile, the European Union abandoned its 2035 internal combustion engine vehicle ban, a symbolic retreat from aggressive energy transition policies.

“Any slowdown in energy transition policies adds to bearish sentiment for battery metals, including nickel,” Manthey cautioned.

The 2026 Nickel Price Per Kilogram Outlook: Subdued at Best

Looking ahead, the consensus among analysts is decidedly bearish for nickel pricing. Ewa Manthey forecasts that “prices will struggle to hold above US$16,000 given the surplus.” She projects an average nickel price of US$15,250 per metric ton for 2026—equivalent to roughly US$15.25 per kilogram. That aligns closely with the World Bank’s 2026 forecast of US$15,500, rising modestly to US$16,000 in 2027.

Upside scenarios exist but appear narrow. Unexpected supply disruptions or stronger-than-anticipated stainless steel and battery demand could provide temporary relief. Yet “sustained levels above US$19,000 look unlikely under current fundamentals,” according to Manthey. Russia’s Nornickel, one of the world’s largest nickel producers, estimates the refined nickel market will face a surplus of 275,000 MT in 2026, reinforcing the bearish outlook.

For nickel producers and investors, the implication is clear: until market fundamentals shift materially—whether through aggressive supply cuts, an unexpected demand surge, or significant policy changes—a meaningful price recovery remains unlikely. The per-kilogram nickel price will likely remain tethered to the lower end of the profitability band for the foreseeable future, constraining investment returns and limiting exploration enthusiasm across the sector.