Live Nickel Prices and Inventory Data

Nickel is the most policy-dependent metal in the base metals complex, and July 2026 is shaping up as the month when Indonesia's Ministry of Energy and Mineral Resources decides the market's trajectory for the rest of the year. The current RKAB (Work Plan and Budget) quota of 260-270 million wet metric tonnes of nickel ore — set in late 2025 — represented a dramatic shift from the 379 million wmt approved in 2024, and it sent prices spiking to $19,050 in January. But prices have since retreated 12% as the market questioned whether the quota would hold.

The skepticism is grounded in history. Indonesia has a pattern of announcing supply discipline — shortening RKAB approvals from three-year to annual cycles, tightening the domestic pricing benchmark (HPM) — and then quietly expanding quotas when smelters complain about ore shortages. The end-of-July review is the mechanism through which this adjustment typically occurs. Market participants are pricing in a roughly 50% probability that the quota is raised toward 360 million wmt, which would restore the supply overhang that has depressed nickel prices since the 2023 surplus began.

But there are reasons to think this time might be different. President Prabowo Subianto's administration has made downstream processing — not raw ore export volume — the centerpiece of its economic strategy. The policy logic runs: limit ore supply → raise domestic ore prices → improve margins for Indonesian smelters → attract investment in higher-value nickel sulfate and cathode production. Raising the quota undermines that logic. "Indonesia is serious about supply discipline," argues a senior nickel analyst at CRU. "The political cost of reversing the quota cut six months after announcing it is higher than the market appreciates."

The inventory picture adds another dimension. LME nickel inventories at 468,000 tonnes are at record levels — a figure that on its face screams oversupply. But composition matters. Approximately 60-65% of LME nickel stocks are in the form of nickel briquettes and cut cathodes, which are not directly usable by the stainless steel industry and require additional processing before they can enter the battery supply chain. The Class 1 nickel that battery manufacturers need — nickel sulfate and high-purity cathode — is considerably tighter, and the premium for sulfate over LME has widened through 2026.

Demand growth is coming from two distinct sources that don't always pull in the same direction. Stainless steel — still 65% of global nickel consumption — is growing at a steady 3-4% annually, driven by Asian infrastructure and consumer goods manufacturing. The battery sector — now roughly 18% of demand and growing at 15-20% annually — is expanding even faster. The International Energy Agency's latest critical minerals report projects nickel demand from EV batteries alone to reach 900,000 tonnes by 2027, up from roughly 500,000 tonnes in 2025. This bifurcation creates a market where different nickel products trade at different prices: LME nickel is cheap because briquette inventory is abundant, but battery-grade nickel commands a significant premium.

The US has entered the nickel supply race with urgency. The Department of Energy's Critical Materials Program has allocated $3.2 billion for domestic nickel processing capacity, and the Defense Production Act has been invoked to accelerate mine development at the Tamarack project in Minnesota and the Eagle mine expansion in Michigan. These projects will take 3-5 years to reach production, so they do not affect the 2026 supply balance, but they signal a structural shift: the US is treating nickel supply security as a national defense priority, which will increasingly distort trade flows away from pure market economics.

The bear case for nickel is straightforward: Indonesia raises the quota to 360 million wmt, Chinese NPI (nickel pig iron) production surges, LME inventories continue to build, and nickel retreats to $14,000-15,000 — the marginal cost of Indonesian NPI production. This scenario has played out before, most notably in 2023-2024, and it requires only that Indonesia returns to its historical pattern of prioritizing volume over price.

The bull case — articulated most forcefully by the Crux Investor analyst community — argues that Indonesia's supply discipline will hold, the quota stays at or below 270 million wmt, and the LME inventory build reverses as stainless steel and battery demand absorb the surplus. In this scenario, nickel moves toward $20,000 per tonne, the level at which higher-cost producers in New Caledonia, Australia, and Russia can operate profitably. "Nickel is headed to $20,000 as Indonesia limits production and EV demand surges," is the bull thesis in one sentence.

The base case — and the one reflected in current pricing — is that Indonesia raises the quota modestly, to perhaps 300-310 million wmt, providing enough ore to keep smelters running at 80-85% utilization without flooding the market. In this scenario, nickel trades in a $16,000-18,000 range through Q3, with the Class 1 premium remaining elevated for battery-grade material.