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Bernstein has increased its 2026 nickel price forecast to $17,357 per metric ton, up from an estimated average of $15,164 per ton in 2025, citing a significantly more balanced global nickel market than previously expected. The research firm said the market now faces only a modest surplus, a sharp improvement from forecasts earlier this year that projected an oversupply exceeding 200,000 metric tons.
The improved outlook is largely attributed to developments in Indonesia, the world's largest nickel producer. Bernstein noted that tighter ore availability, higher government benchmark prices (HPM), and increased uncertainty surrounding the country's commercial policies have pushed production costs higher. C1 cash costs at the 75th and 90th percentile are now estimated at $17,870 per ton and $18,650 per ton, respectively, compared with $14,650 and $15,300 in 2025.
The firm added that speculation over Indonesia raising its RKAB mining quotas to 300-350 million wet metric tons, above the initially announced 260-270 million, likely contributed to nickel's price pullback in June.
Geopolitical tensions between Iran, the United States, and Israel have also affected the market by disrupting sulphuric acid supply, a key input for Indonesia's HPAL nickel processing. Granular sulphur prices surged from below $600 per tonto roughly $1,000 per ton, forcing some HPAL producers to cut output. Bernstein expects cost pressures to ease once supply conditions normalize and sulphuric acid availability improves.
On the demand side, global electric vehicle sales through April increased just 0.5% year over year. Battery electric vehicle sales rose 5.1%, while plug-in hybrid sales declined 8.5%. The growing dominance of lithium iron phosphate (LFP) batteries, which do not require nickel, continues to limit demand growth, although sodium-ion batteries could become a meaningful market over the next few years as production costs approach parity with LFP by the end of 2026.
Meanwhile, combined LME and SHFE nickel inventories have climbed to about 375,000 metric tons, equal to roughly 9% of expected 2025 mine production. Despite higher stockpiles, Bernstein expects stainless steel, the largest end-use market for nickel, to remain a key demand driver, with first-use nickel consumption projected to grow approximately 5% year over year.
