The consensus for 2026 is a large nickel surplus. INSG projects 260,000-288,000 tonnes. ING projects 261,000 tonnes. Argus projects 288,000 tonnes. Sumitomo Metal Mining projects 256,000 tonnes. (FACT: INSG, ING, Argus, Sumitomo, 2025-2026) But Macquarie Bank's March 2026 research note presented a dissenting view: tighter Indonesian quotas, limonite shortages, and a tailings dam incident at Morowali could flip a previously expected 90,000 tonne surplus into an actual deficit. (FACT: Macquarie Research, March 2026)
The Macquarie thesis rests on three pillars. First, the Indonesian ore quota cut. Second, limonite ore — the nickel-rich laterite used for HPAL production of battery-grade intermediates — is in short supply because Indonesia's quota applies to total ore, and operators prioritize higher-grade saprolite for NPI production, leaving less limonite for HPAL. Third, the tailings dam incident at the Morowali Industrial Park in 2025 disrupted MHP output at a time when battery-grade nickel was already tightly supplied. (FACT: Macquarie, SMM, Fastmarkets)
Macquarie's price assessment — a "floor" around $17,000-18,000/t for LME nickel — reflects a view that the market has already priced the surplus and is now discounting the risks on the supply side. The bank's argument implies that if Indonesian policy tightens further or if demand from stainless and batteries remains resilient, the surplus narrative could unravel quickly. (FACT: Macquarie, March 2026)
The market's response to the Macquarie view was muted at first — LME nickel was trading near $17,000/t in early March. But by May 2026, with LME nickel at $18,985/t and the quota cut confirmed, the bank's contrarian call has gained credibility. ING still projects a 261,000 tonne surplus for 2026, but notes that "tighter Indonesian quotas and higher costs could reduce the surplus." The weight of evidence is shifting. (FACT: ING Think, LME data)
The Macquarie deficit call is a warning sign for procurement teams that have been relying on the consensus surplus to keep prices low. Consensus has been wrong before — most recently in zinc, where ILZSG's 271,000 tonne surplus forecast flipped to a 19,000 tonne deficit. The same dynamics (supply policy intervention + structural demand) are now visible in nickel. Do not base H2 2026 procurement on the assumption that the surplus will persist. The trend is toward tightening, and Macquarie is not usually wrong about supply-side disruptions in critical minerals. Hedge at least 40% of H2 volume now, while the surplus narrative is still keeping forward prices manageable.