Nornickel expects nickel surplus to decrease drastically or balance in 2026 amid supply discipline in Indonesia
MOSCOW. June 23 (Interfax) - Nornickel expects the nickel surplus to decrease substantially to around 20,000 tonnes or for balance to return to the market in 2026 as Indonesia restrains the surplus in supply, the company said in a metals market review.
This year, Indonesia has decreased ore production quotas, and could see nickel production fall 19% to 2.3 million tonnes with the expected level of quota utilization and a decline in the metal content of ore, "leading to a balanced global nickel market this year", the review reads.
In February 2026, Nornickel forecast that the global nickel market surplus could increase to 275,000 tonnes, from 240,000 in 2025, providing the status quo in Indonesian production is maintained.
The global nickel market is showing signs of shifting from structural oversupply towards a more balanced phase, driven primarily by supply discipline in Indonesia, Nornickel said. In 2025, Indonesia mined around 320 million tonnes of nickel ore against an approved quota of 379 million tonnes. However, with the expected utilization rate at around 90%, actual domestic ore mining may be closer to 270 million tonnes, while declining nickel content in ore is further reducing the amount of contained metal available for production. "However, the July mid-year review is critical, as significant additional quota approvals or quota utilization could restore a visible surplus," Nornickel said.
Another important market change was the change in the mechanism for calculating the minimum price for ore in Indonesia causing an increase in producer costs. Sulphur prices have also jumped amid the Middle East crisis.
Nornickel expects global nickel demand to increase by 2% in 2026. In stainless steel, nickel demand is expected to show only limited growth, as a higher share of scrap in China's feed mix reduces the need for primary nickel despite continued stainless steel output expansion.
Nornickel expects the nickel market surplus to increase moderately to 55,000 tonnes in 2027, however, the outlook remains highly dependent on Indonesia. "Quota approvals, actual utilization rates, sulphur availability and further policy decisions will determine whether the market stays close to balance or returns to a more visible surplus," the company said.
Copper market
A moderate surplus will remain on the refined copper market in the near future, despite ongoing pressure on the concentrates market, Nornickel said. Demand for refined copper is forecast at 28.3 million tonnes in 2026, up 3%, and 29.3 million tonnes in 2027, a further 3% increase, while refined copper supply is expected to grow 1% to 28.6 million tonnes in 2026 and 3% to 29.4 million tonnes in 2027. This assumes a surplus of 0.25 million tonnes in 2026 and 0.16 million tonnes in 2027.
Nornickel in February forecast a deficit of 172,000 tonnes, equivalent to two days of consumption.
Supply constraints remain concentrated at the mine and concentrate stages, Nornickel said. The copper concentrate market remains the tightest part of the value chain. Benchmark TC/RCs for 2026 were settled at $0/t, reflecting intense competition among smelters for limited concentrate supply. Nornickel expects the concentrate market to remain undersupplied in 2026, with a deficit of around 0.8 million tonnes.
Global mined copper production is expected to increase only modestly, from 23.5 million tonnes in 2025 to 23.6 million tonnes in 2026 and 24.5 million tonnes in 2027, Nornickel said. Key risks include the pace of recovery at Grasberg, the slower-than-expected recovery at Kamoa-Kakula, infrastructure and logistics constraints in the DRC, declining ore grades and operational complexity in Chile and Peru, as well as sulphuric acid availability for SX-EW operations.
Copper demand has remained resilient despite higher energy prices, more hawkish monetary expectations and weakness in several traditional end-use sectors, Nornickel said. Demand continues to be supported by power grid investment, electrification, renewable energy, battery manufacturing, energy storage and AI-related data-center infrastructure.
Overall, the near-term copper outlook is dominated by the Iran/Persian Gulf risk channel and changing expectations for U.S. monetary and trade policies. "Over the medium and long term, the market remains supported by general growth of electricity consumption per capita, grid expansion, digital infrastructure development, as well as industrial regionalization. At the same time, project delays, sulphuric acid availability and limited investment in new mines continue to keep structural supply risks high," Nornickel said.
