In 2025, the global supply of primary nickel continued to grow, with the majority of the increase still coming from Indonesia, while the pace of production cuts in other regions slowed. On the one hand, high-cost marginal capacity has largely exited the market, while the ramp-up of new capacity in Indonesia intensified competition. On the other hand, factors including trade friction led to reduced liquidity for nickel products, resulting in significant divergence in price trends among different products. Production in countries like Canada and Brazil saw varying degrees of increase. Mysteel estimates global primary nickel production reached 3.7921 million tonnes in 2025, a year-on-year increase of 11.8%.
Despite a continued slowdown in global economic growth in 2025, the decline in nickel prices to some extent stimulated certain demand segments, and global primary nickel consumption still maintained an upward trend. Regionally, China remained the world's largest consumer of primary nickel, with consumption growth in the stainless steel sector continuing to be the main driver. Primary nickel consumption in mainland China is estimated at 2.1376 million tonnes in Ni. content for 2025, up 4.7% year-on-year. In Indonesia, Delong Stainless maintained low production rates, and progress in the battery industry chain was generally slow, resulting in steady demand. For 2026, nickel consumption in Indonesia is expected to increase with the anticipated restart of Delong's operations and the commissioning of projects like Glory Metal. The Indian market sustained growth in recent years primarily driven by demand, although the pace slowed in 2025. In Europe, nickel consumption declined due to significant economic pressures, with primary nickel consumption reaching 276,200 tonnes in Ni. content in 2025, down 1.3% year-on-year.
Looking ahead to 2026, Mysteel expects the nickel market will continue to face oversupply pressure with prominent structural contradictions. On the supply side, the increase will primarily come from the production capacity of MHP in Indonesia, which has a significant cost advantage. Its substantial planned capacity is scheduled for release between 2025 and 2027, continuously exerting downward pressure on nickel prices. Meanwhile, the demand side lacks strong growth momentum. Stainless steel demand is closely tied to the real estate cycle, and it is difficult to see significant improvement in the short term. In the power battery sector, although the high-nickel ternary route is the future direction for solid-state batteries, its large-scale commercial application is not expected until around 2030, unlikely to provide substantial incremental demand for nickel in 2026. Consequently, the global nickel market is projected to remain in a surplus.
Against this backdrop, the price floor for nickel will be supported by marginal production costs. Currently, the integrated process of producing MHP to electrowinning nickel in Indonesia still maintains a good overall profit due to the considerable revenue from its by-product cobalt. However, the cost for producing electrowinning nickel via the RKEF-nickel matte integrated route will rise alongside increasing nickel ore prices, currently estimated at around Yuan 125,000/tonne. As the commissioning of MHP capacity pushes the cost curve downward, the average nickel price is also expected to be dragged lower. The core trading range for SHFE nickel prices in 2026 is forecasted at Yuan 100,000-155,000/tonne, with the LME nickel price range projected at US $13,000-$20,000/tonne. Compared to nickel prices in 2023-2025, the overall trend shows a higher price floor.
The price trajectory and volatility of nickel in 2026 may largely depend on two key variables. First is the impact of Indonesian policies, particularly the specific quotas in the annual RKAB approvals and whether substantive measures such as quota cuts or restrictions on new capacity will be introduced. Second is the pace of high-cost capacity rationalization. Current price levels have already pushed some capacity-lacking integrated resource advantages into losses. If sustained losses lead to large-scale production halts, it could accelerate the market's process of finding a bottom and help build a firmer floor for prices.
Written by Cora Ji, jiruyan@mysteel.com
