Nornickel Nickel Surplus Narrows but Persists into 2026

Nornickel

Nornickel nickel surplus will remain in place through 2026, though it narrows from 2024 levels. The Nornickel nickel surplus forecast sits at 120,000-130,000t for 2025-26. As a result, the Nornickel nickel surplus still weighs on class 1 prices and investment plans.

Demand grows while supply still outpaces

Global nickel demand rises strongly into 2026. Nornickel projects 5% growth this year to 3.62mn t. It expects another 6% rise next year to 3.82mn t. Stainless steel expansion in China remains the main driver. However, non-stainless uses like superalloys also strengthen. Meanwhile, EV trends shift toward non-nickel chemistries, trimming chemicals demand.

Indonesia risks and price pressure shape supply

Supply still expands enough to keep a surplus. Nornickel sees primary supply up 4% in 2025 to 3.74mn t. It expects 6% growth in 2026 to 3.95mn t. However, Indonesia faces ore tightness and grade decline risks. Higher royalties could also curb output. Therefore, marginal producers outside Indonesia face losses at $15,000-16,000/t LME. Closures later this year look increasingly likely.

Global balance trends favor gradual tightening. The surplus eases from 170,000-180,000t in 2024. Yet inventories and cheaper class 2 units cap rallies. Price spreads between class 1 and intermediates remain narrow. Investment decisions will hinge on sustained deficits, not brief squeezes.

Corporate performance supports cautious optimism. Nornickel reported first-half Ebitda of $2.6bn, up 12% year on year. Cost control and mix helped offset price headwinds. Even so, capital discipline remains essential until surpluses clear.

The Metalnomist Commentary

Nickel fundamentals improve, but not fast enough to flip the balance by 2026. Watch Indonesian ore policy, class 2 to class 1 conversions, and EV chemistry choices. A durable bull case likely needs project delays plus stronger Western alloy demand.