Nickel’s forecast shortage has become a small surplus
INSG has replaced its projected 2026 deficit with a 19,000-tonne surplus. The revision challenges a simple shortage thesis while leaving little room for production or demand surprises.
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Nickel
Two different metals wearing the same name. Indonesia changed the game.
Bulls vs. Bears — NickelThe state of the argument, from recent news flow
The Bull Case
- High-nickel cathodes deliver the energy density premium EVs want.
- Class-1 sulphide nickel is genuinely scarce — Indonesia mostly makes class 2 feed.
- Western producers in care-and-maintenance have removed supply that's slow to restart.
- Stainless steel demand provides a large, durable demand floor.
- ESG-screened buyers will pay a premium for clean, non-laterite units.
The Bear Case
- Indonesia's HPAL/matte wave flattened the cost curve and crushed the price.
- Class-2-to-class-1 conversion erased the old battery-grade scarcity story.
- Most marginal Western mines are simply uneconomic at these prices.
- Chinese-backed Indonesian capacity keeps expanding regardless of price signals.
- LFP's rise trims the high-nickel cathode growth case.
39CoolHeat Index · 0–100
Model demonstration: news, volume and equity inputs are illustrative.
Prices (US$)
| Nickel US$/t · Illustrative sample · 2026-06-16 | 16,400 | -5.0% 6M | -10.0% 1Y | 39 |
Nickel — trailing price
Illustrative sample · 2026-06-16The desk — term structure & inventories
What the spot price won't tell you: the shape of the futures curve (who's paying up for metal now) and where warehouse stock is heading. Figures are indicative until a live LME/CME feed is wired.
Nickel
Illustrative example — not current exchange quotes. This curve does not update automatically.
Contango+3.7% / yr1-yr roll -3.8%
Deferreds trade over spot — comfortable supply and positive carry. A long rolling the front bleeds the spread.
Sample data for explaining term structure.
Illustrative example — not reported exchange stocks. These values do not update automatically.
Building+93.5% (12 mo)LME
Final sample value 178 kt · Sample data for explaining inventory trends.
Nickel is really two markets: class 1 (the high-purity stuff batteries want) and class 2 (ferronickel, NPI, the stainless feed). Indonesia's laterite-and-HPAL build-out, much of it China-backed, has reshaped the whole cost curve and torched a lot of Western producers' economics.
Latest takes
Indonesia's nickel 'cut' is leaking. Ore now sells below the government's own benchmark.
In August the nickel market was trading an unconfirmed rumour out of Jakarta. By the end of September revised quotas were being approved, laterite ore premiums had turned negative and the limonite benchmark had been cut by almost half. The ministry still won't say by how much the quota has grown.
Jakarta is now nickel’s OPEC. The tape is trading rumours the ministry will not confirm.
ESDM capped 2026 nickel ore against 2025’s authorised tonnes and said it would not grant a broad lift. An unconfirmed Weda Bay top-up sent LME down; the ministry said the application was still under assessment. On 24 August APNI said no member had received a revised RKAB. The 25-million-tonne figure is a rumour. It has not been granted.
BHP shut 400kt of WA nickel — now a US$2.30/lb Brazilian mine and a 3.3% Kambalda shoot get the field to themselves
With high-cost Australian nickel idled, two sulphide developers — Centaurus Metals' Jaguar in Brazil and Lunnon Metals' Baker at Kambalda — are advancing first-quartile, Class-1-bound projects into a structurally tighter market.
Indonesia didn't win the nickel war. It changed what winning means.
A wall of Indonesian laterite and HPAL capacity, much of it China-backed, has flattened the cost curve and left a graveyard of Western nickel producers. Pretending class 1 and class 2 are the same metal is how you misread the whole thing.
Nickel operations on the map
| Operation | Country | Owner | Stage |
|---|---|---|---|
| Sorowako | Indonesia | PT Vale Indonesia | Producing |
| Raglan | Canada | Glencore | Producing |
| Moa | Cuba | Moa JV — Sherritt International / GNC (Cuba) | Producing |