Bernstein has increased its average nickel price forecast for 2026 to $17,357 per metric ton, compared with an estimated average of $15,164 per ton in 2025, after concluding that the global nickel market is more balanced than previously anticipated. The research firm said current supply and demand dynamics point to only a modest surplus, a sharp contrast to forecasts made earlier this year that projected an oversupply exceeding 200,000 metric tons.
Indonesia Continues to Shape Global Supply
According to Bernstein, Indonesia remains the key driver of the market outlook after tightening ore availability, raising production costs through higher HPM pricing and creating additional uncertainty around its commercial framework.
The brokerage estimates that C1 cash costs have climbed significantly, with the 75th percentile reaching $17,870 per metric ton and the 90th percentile increasing to $18,650 per ton. These figures compare with $14,650 per ton and $15,300 per ton respectively during 2025.
Bernstein also noted that reports suggesting Indonesia could raise its RKAB mining quotas during its July review to between 300 million and 350 million wet metric tons, above the initially proposed 260 million to 270 million, likely contributed to the decline in nickel prices seen during June.
Geopolitical Risks Increase Production Costs
The conflict involving Iran, the United States and Israel has also affected nickel production by disrupting sulphuric acid supplies, a critical input for High Pressure Acid Leach (HPAL) operations.
Bernstein said tighter sulphuric acid availability forced some Indonesian HPAL producers to reduce output after granular sulphur prices climbed from below $600 per ton to approximately $1,000 per ton.
The firm expects production costs could begin to ease once supply chains stabilise, particularly if a peace agreement improves sulphuric acid availability.
EV Demand Remains Mixed
On the demand side, Bernstein highlighted relatively subdued growth in the electric vehicle market. Global EV sales through April increased just 0.5% compared with the previous year. Battery electric vehicle sales rose 5.1%, while plug-in hybrid sales declined by 8.5%.
Lithium iron phosphate (LFP) batteries, which do not require nickel, continue to dominate both electric vehicle and energy storage markets. However, Bernstein believes sodium-ion battery technology could become an additional source of nickel demand over the coming years as manufacturing costs are expected to reach parity with LFP batteries by the end of 2026.
Stainless Steel Continues to Support Consumption
Combined inventories held on the London Metal Exchange (LME) and the Shanghai Futures Exchange (SHFE) have increased to around 375,000 metric tons, equivalent to roughly 9% of projected global mine production in 2025.
Despite elevated inventories, Bernstein said underlying nickel demand remains resilient, supported primarily by stainless steel production, which continues to represent the largest source of first-use nickel consumption. The firm expects stainless steel demand to grow by approximately 5% year-on-year.