The International Nickel Study Group (INSG) revised its 2026 outlook in April from a 261,000-tonne surplus to a 32,000-tonne deficit — the first deficit since 2021. The reversal represents one of the most consequential nickel market forecast revisions in recent years, driven primarily by Indonesian regulatory changes.
Indonesia sharply reduced its 2026 nickel ore production quotas (RKAB) to about 250-270 million wet metric tonnes from ~375 million in 2025 — a reduction of roughly 30-35%. The move aims to curb oversupply, support prices, and align ore output with domestic smelter capacity. Delays in RKAB approvals have already halted operations at some mines, including PT Vale Indonesia.
LME three-month nickel traded at ~$18,689/t as of June 5, consolidating after an April rally from $17,000 to over $19,000/t. The metal is up 14.5% since the start of 2026. LME warehouse stocks, which had built to ~282,792 tonnes in March, have reversed their rising trend, reflecting the tightening market.
The deficit is small relative to the 283,000-tonne surplus estimated for 2025, meaning the large inventory overhang still acts as a buffer and caps near-term upside. But the trend is clear: the market has pivoted from chronic oversupply to a finely balanced state where any further supply disruption will amplify price sensitivity.
Adding to supply constraints, Zimbabwe has banned unprocessed ore exports. Combined with the Indonesian quota cuts, this marks a policy shift across multiple producing nations toward resource nationalism and supply management.
The nickel market has structurally shifted. Even a 32kt deficit in a market consuming 3.7Mt is bullish because it ends the multi-year surplus narrative. Buyers should expect higher average prices in H2 2026. For stainless steel procurement, track Indonesian quota enforcement — if the cuts hold, nickel surcharges will rise through Q3.