The International Nickel Study Group has reversed its 2026 nickel balance. Its October outlook puts production at 3.87 million tonnes against demand of 3.85 million tonnes, a 19,000 tonne surplus, where April’s outlook had production of 3.71 million tonnes, demand of 3.74 million tonnes and a 32,000 tonne deficit, which would have been the first annual shortfall since 2021. For 2027 the group expects production of 4.07 million tonnes against demand of 4.00 million tonnes, a 70,000 tonne surplus.
The flip is a supply revision, not a demand collapse. INSG raised its production forecast by 153,000 tonnes from April, against a 102,000 tonne rise in the consumption forecast. Stainless steel output is expected to keep expanding through 2026 and 2027, while nickel use in electric vehicle batteries grows more slowly than expected because lithium iron phosphate chemistries, which use no nickel, keep taking share.
The revision lands even though Indonesia, the largest producer, has set lower ore quotas for 2026. In practice Indonesian capacity growth continues to outrun the quota signal, which is the same pattern visible in that country’s coal export management this year.
For producers, a forecast surplus compresses the premium buyers pay for prompt, high purity material and weakens the financing case for greenfield nickel outside Indonesia. Canadian and Australian sulphide projects, which sell partly on a scarcity and jurisdiction premium, are the most exposed to a balance that no longer shows scarcity.