PT Vale Indonesia Tbk. (INCO) has acknowledged that rising nickel supply, particularly from Indonesia, is a key challenge for nickel prices in the near term, prompting a cautious short-term market outlook while maintaining a constructive view over the medium and long term.
President Director and CEO Bernardus Irmanto said supply growth and price volatility are the main challenges facing the nickel industry. He noted that increasing Indonesian supply is a factor industry participants need to watch. "In the short term, we see supply growth, especially from Indonesia, and price volatility as challenges," Bernardus said on Thursday (September 10, 2026). He added that the Indonesian government is seeking to control nickel production to keep prices profitable for industry players.
On demand, Bernardus said nickel still has room to grow despite rising LFP battery penetration, which now exceeds 55% of global EV batteries. Outside China, however, about 80% of EV batteries still use nickel-based chemistry. Additional demand could come from data centers, robotics, AI infrastructure and renewable energy.
Vale Indonesia is diversifying through HPAL projects in Pomalaa and Bahodopi, while maintaining nickel matte output and developing MHP. The company also faces high sulfur and sulfuric acid prices. Management said sulfur inventories are sufficient through Q3 2026, but potential impacts may emerge in Q4 2026 and 2027. Vale is testing pyrite as a partial sulfur substitute and studying a sulfuric acid facility in Pomalaa.
LME nickel was quoted at US $16,666/tonne today, down 1.37% from the previous close.
