Steel producers and buyers are closely monitoring nickel prices after a sharp spike in prices threatened to become a key driver of rising stainless steel prices in the first months of the year 2026.
The closing prices of the three-month contracts on the LME show that nickel prices in mid-December rose by about $15,000 per tonne compared to 2025. On December 16, nickel prices reached a low of $14,263 per ton, which is close to the five-year low recorded in April 2025. However, prices accelerated in the second half of December last year, peaking at $18,756 per tonne on January 23.
Prices for various ferrous and non-ferrous metals rose in January amid a surge in investor activity. Nickel prices initially rose amid rumors that production quotas in Indonesia, the world's largest nickel producer, would be reduced in 2026. Indonesia's share in global nickel production is about 60%, up from 31.5% in 2020. On December 19, Indonesia's Ministry of Energy and Mineral Resources confirmed plans to reduce the country's annual nickel ore production quotas by about a third, to 250-260 million tons. These changes are subject to final approval in March.
- This article first appeared in the January issue of the MEPS International Stainless Steel Review magazine. The publication provides information on market conditions, stainless steel prices, indices and forecasts in key markets in Europe, Asia and North America. Contact the members of the European Parliament for detailed information on how to subscribe.
Respondents from among the members of the European Parliament, for example, the Indonesian government wants to limit ore production in order to keep nickel prices at about 17,000 US dollars per ton. Its goal is to better balance ore supplies with the needs of domestic steel mills, while maintaining the profit margins of companies in the industry. However, participants in the stainless steel market in different countries interviewed for the preparation of this report expressed doubts about the sustainability of the January increase in nickel prices.
The global nickel oversupply for 2025 is estimated at almost 200,000 tons and is expected to remain at a similar level this year. At the beginning of January, the reserves of first-class nickel on the LME amounted to just over 255,000 tons. At the time of publication of this review, this volume has already exceeded 285,000 tons. Consequently, the oversupply is expected to undermine any price support provided by the planned reduction in nickel ore production in Indonesia.
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