According to price monitoring by SunSirs, the nickel market traded at low levels throughout 2025.  Towards the end of the year, however, news that the Indonesian Nickel Miners Association (APNI) claimed the government planned to significantly reduce nickel ore production quotas by approximately 34% in 2026 caused nickel prices to surge to 137,733.33 RMB/ton, resulting in a 9.77% increase for the year. The lowest price of the year was 115,050 RMB/ton on December 16th, and the highest price was 137,733.33 RMB/ton at the end of the year.

Market Review

In the first half of the year, nickel prices fluctuated significantly around Indonesian and Philippine industrial policies and macroeconomic factors, with the price centering around 125,000 RMB/ton. In the first quarter, due to the combined effects of reduced RKAB approval quotas in Indonesia, the proposed ban on nickel ore exports in the Philippines, and seasonally tight fundamentals, nickel prices rose to their highest point of the year. However, as the disruptions in resource supply subsided and the US implemented reciprocal tariff policies in April, nickel prices quickly fell from their highs.

From June to October, nickel prices fluctuated within a narrow range around 120,000 RMB/ton. On the one hand, easing tariff concerns, expectations of interest rate cuts by the Federal Reserve, and strong demand from the new energy vehicle sector provided support for nickel prices. On the other hand, high inventory levels and oversupply pressures continued to limit upward movement. It wasn't until November that expectations of tighter supply from Indonesian mines failed to materialize, and with the downstream market entering its off-season, weak demand and the exacerbation of oversupply issues led to a decline in nickel prices.

The nickel price experienced a "V-shaped" trend in December. In the first half of the month, concerns about high nickel inventories and weak demand led to a continuous decline in prices. The real turning point began on December 17th, when the Federal Reserve cut interest rates as expected, coupled with a recovery in Chinese economic data, providing a systematically positive financial environment for commodities. On the other hand, the Indonesian Nickel Miners Association (APNI) claimed that the government planned to significantly reduce nickel ore production quotas by approximately 34% in 2026. This provided a double impetus for an epic surge in nickel prices, instantly transforming the downward trend into a strong upward movement.

Nickel Supply

The supply of nickel ore was ample

The actual supply of nickel ore in 2025 was relatively abundant. On the one hand, although the final figures for Indonesia's RKAB (Mining Business Permit) approvals this year have not yet been released, the amount was at least 298.5 million wet tons, higher than last year's annual production of approximately 271.89 million wet tons. On the other hand, Indonesia significantly increased its imports of nickel ore from the Philippines this year to fill temporary domestic supply and demand gaps. As of October 2025, Indonesian imports of Philippine nickel ore increased by 36.4% year-on-year, an increase of 3.59 million tons.

Global nickel production

According to the latest data report released by the World Bureau of Metal Statistics (WBMS): In October 2025, global refined nickel production was 326,400 tons, consumption was 297,200 tons, resulting in a surplus of 29,100 tons. From January to October 2025, global refined nickel production was 3,204,600 tons, consumption was 2,866,600 tons, resulting in a surplus of 338,000 tons. In October 2025, global nickel ore production was 342,600 tons, and from January to October 2025, global nickel ore production was 3,557,400 tons.

China's nickel production

According to statistics, from January to October, my country's primary nickel production reached 835,000 tons, a year-on-year decrease of 0.5%. Of this total, electrolytic nickel production was 326,000 tons, a year-on-year increase of 11.2%; and nickel-containing pig iron production was 229,000 tons, a year-on-year decrease of 7%.

Nickel import and export volume

According to Chinese customs data, China imported 12,670.512 tons of refined nickel in November 2025, a month-on-month increase of 2,929 tons, or 30.07%; and a year-on-year increase of 3,676 tons, or 40.86%. Net imports of refined nickel this month totaled 1,744.426 tons, a decrease of 259.79% month-on-month and 160.39% year-on-year. From January to November 2025, China's cumulative imports of refined nickel reached 207,794.526 tons, a year-on-year increase of 128,815 tons, or 163.10%. China has a very high dependence on imports for nickel resources (especially nickel pig iron and refined nickel). The main source of refined nickel has shifted from Russia to Norway and South Africa, while nickel pig iron supply is almost entirely dependent on Indonesia.

Nickel Demand

Nickel downstream applications (by percentage)

In terms of global primary nickel demand, stainless steel is the main driver, while batteries provide the primary growth. Stainless steel, batteries, alloys, electroplating, and other applications account for 65%, 15%, 13%, and 7% respectively. For pure nickel, alloys and castings are the main application areas, accounting for nearly 50%. The substitution of nickel intermediates (MHP/high-grade nickel matte) for nickel beans has resulted in the consumption of pure nickel in the battery (nickel sulfate) sector accounting for only 1%.

Apparent consumption of nickel

According to customs data, apparent nickel consumption has shown an upward trend since 2022, reaching the levels of 2021.

With the real estate sector acting as a drag, stainless steel is unlikely to perform better than expected.

Over the past 25 years, China's stainless steel production has maintained steady growth. From January to November, the production of 300-series stainless steel increased by 7.4% year-on-year (compared to 8.5% previously). However, as a commodity closely linked to the real estate cycle, downstream demand has been weak due to the slowdown in the property market. Overall stainless steel inventories remain high, and destocking is proving difficult. Meanwhile, the profitability of producing stainless steel from primary nickel is low. Therefore, it is expected that the stainless steel sector will not perform exceptionally well in 2026.

Vehicles using ternary lithium batteries account for a relatively small proportion.

In 2025, demand for new energy vehicles was strong, with ternary precursor production returning to the high levels of 2022. As of November, ternary production increased by 11.41% year-on-year compared to 2024. However, since the beginning of 2025, the proportion of ternary batteries in new energy vehicles had remained below 20%, and this installation structure severely restricts the demand growth in the new energy sector. According to TrendForce, all-solid-state batteries are currently in the stage of transitioning from prototype cells to engineering applications. It is expected that demonstration applications in the electric vehicle sector will begin at the thousand-unit level in 2027-2028, with large-scale applications starting after 2030. Therefore, demand growth in the new energy sector in 2026 may be relatively limited.

The relatively small scale of electroplating, alloys, and specialty steel production limits their overall impact.

Electroplating, alloys, and special steels are the main components of the downstream market for refined nickel. Demand for nickel in electroplating remains stable, with an annual consumption of approximately 43,000 tons of nickel; nickel consumption in alloys and special steels has grown steadily since 2021, with a compound annual growth rate of 14% over the past five years. However, this segment accounts for a relatively small proportion of the total demand for nickel, so its overall impact is limited.

Policy Aspects

Indonesia's policy shift, including tighter quotas and cost restructuring, is driving an upward shift in the nickel price level.

At the end of the year, Indonesia issued two key policy signals: firstly, a significant reduction in mining quotas: the target for nickel ore mining quotas (RKAB) in 2026 is set at 250 million tons, a decrease of over 34% compared to 379 million tons in 2025; secondly, an adjustment to the pricing method: plans are underway to revise the formula for calculating the reference price of nickel ore, treating associated metals such as cobalt as independent commodities and levying royalties on them.

If these two policies are implemented, they will directly increase nickel mining costs from two dimensions: the total supply of ore and the tax cost of mining. It is expected that the cost center of the Indonesian nickel industry chain will systematically shift upwards in the future, and this will be transmitted to the global market through the trade chain, becoming a key factor supporting nickel prices in the medium and long term.

2026 Summary and Outlook

In summary, a nickel surplus is already a certainty, and resource policies in Indonesia and the Philippines are the main variables affecting nickel fundamentals. Before Indonesia's policies are finalized, its production adjustments, given its status as a "giant" accounting for over 50% of global nickel supply, are sufficient to significantly impact the global supply and demand balance.

If Indonesia's policies are implemented, mining costs will systematically increase. Coupled with the limited room for further cost reductions in domestic integrated production processes, the "bottom range" of nickel prices is expected to be solidified. The current price of around 130,000 RMB/ton is already close to the break-even point for most companies. On the demand side, demand for new energy batteries (especially high-nickel ternary batteries) is expected to rebound in 2026, and inventory reduction in the stainless steel industry is nearing completion. Downstream restocking demand may provide support for nickel prices.

However, looking back at 2024, the final quota approved by Indonesia was higher than the initial planned target, suggesting that the policy might be more talk than action. If the actual quota in 2026 does not shrink significantly, the rebound in nickel prices may be limited.

Overall, if Indonesia's nickel ore quotas are reduced as planned in 2026 and tax adjustments are implemented, the contraction in nickel ore supply will shift from "expected" to "real," and coupled with rising costs, nickel prices are expected to reach the 140,000-150,000 RMB/ton range. Demand is not expected to improve significantly. The average nickel price is projected to increase in 2026; if the policies are implemented effectively, the price could reach 150,000 RMB/ton, but if implementation is weak, it may fluctuate around 130,000 RMB/ton.

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