According to the price monitoring by Business Society, the nickel market experienced a low-level consolidation throughout 2025. Towards the end of the year, nickel prices surged sharply to 137,733.33 yuan/ton, representing an annual increase of 9.77%, driven by news from the Indonesian Nickel Miners Association (APNI) that the government plans to significantly reduce nickel ore production quotas by approximately 34% in 2026. The lowest price for the year was 115,050 yuan/ton on December 16, while the highest price reached 137,733.33 yuan/ton at year-end.

Market Review
In the first half of the year, nickel prices fluctuated significantly due to industrial policies in Indonesia and the Philippines, as well as macroeconomic factors, with the price center hovering around 125,000 yuan. In the first quarter, nickel prices rose to the year's high, driven by reduced RKAB approval quotas in Indonesia, potential nickel ore export bans in the Philippines, and seasonally tight fundamentals. However, prices retreated rapidly from their highs as resource-side disruptions eased and the U.S. implemented reciprocal tariff policies in April.

From June to October, nickel prices remained range-bound around 120,000 yuan. On one hand, easing tariff concerns, expectations of Federal Reserve rate cuts, and strong demand from the new energy vehicle sector provided support at the lower end. On the other hand, high inventory levels and oversupply pressures continued to cap upside potential. By November, expectations for tightening Indonesian ore supply failed to materialize, and downstream demand entered a seasonal lull, leading to weak demand and further exacerbating oversupply, which pushed nickel prices lower.

In December, nickel prices staged a "V-shaped" recovery. In the first half of the month, concerns over high inventory and weak demand drove prices down. The turning point came on December 17, when the Federal Reserve cut interest rates as expected, coupled with improving economic data from China, creating a favorable financial environment for commodities. Additionally, APNI's announcement that the Indonesian government plans to cut nickel ore production quotas by about 34% in 2026 provided a dual catalyst for a historic surge, propelling nickel prices from a downtrend to a sharp rally.

Nickel Supply
Loose Nickel Ore Supply
Nickel ore supply remained relatively loose this year. On one hand, although the final RKAB approval volume in Indonesia was not disclosed, it was at least 298.5 million wet tons, higher than last year's annual production of approximately 271.89 million wet tons. On the other hand, Indonesia significantly increased imports of nickel ore from the Philippines to address domestic supply-demand gaps. As of October 2025, Indonesia's imports of Philippine nickel ore increased by 36.4% year-on-year, adding 3.59 million tons.

Global Nickel Production
According to the latest data from the World Bureau of Metal Statistics (WBMS), global refined nickel production in October 2025 was 326,400 tons, with consumption at 297,200 tons, resulting in a supply surplus of 29,100 tons. From January to October 2025, global refined nickel production totaled 3.2046 million tons, with consumption at 2.8666 million tons, leading to a supply surplus of 338,000 tons. Global nickel ore production in October 2025 was 342,600 tons, while cumulative production from January to October reached 3.5574 million tons.

China's Nickel Production
Statistics show that from January to October, China's primary nickel production was 835,000 tons, down 0.5% year-on-year. Among this, electrolytic nickel production was 326,000 tons, up 11.2% year-on-year, while nickel pig iron (NPI) production was 229,000 tons, down 7% year-on-year.

Nickel Import and Export Volume
According to Chinese customs data, China's refined nickel imports in November 2025 amounted to 12,670.512 tons, an increase of 2,929 tons month-on-month (up 30.07%) and 3,676 tons year-on-year (up 40.86%). Net imports of refined nickel for the month were 1,744.426 tons, down 259.79% month-on-month and 160.39% year-on-year. From January to November 2025, China's cumulative refined nickel imports reached 207,794.526 tons, an increase of 128,815 tons year-on-year (up 163.10%). China's reliance on imported nickel resources, particularly nickel iron and refined nickel, remains extremely high. The primary sources of refined nickel have shifted from Russia to Norway and South Africa, while nickel iron supply is almost entirely dependent on Indonesia.

Nickel Demand
Downstream Nickel Demand Breakdown
Globally, stainless steel remains the dominant driver of primary nickel demand, while batteries provide the main incremental demand. Stainless steel, batteries, alloys, electroplating, and other applications account for 65%, 15%, 13%, and 7%, respectively. For pure nickel, alloys and castings are the primary application areas, accounting for nearly 50%. The substitution of nickel intermediates (MHP/high-grade matte) for nickel briquettes has reduced the share of pure nickel consumption in batteries (nickel sulfate) to just 1%.

Nickel Apparent Consumption
Customs data indicate that nickel apparent consumption has shown an upward trend since 2022, reaching levels comparable to 2021.

Stainless Steel Faces Challenges Amid Real Estate Downturn
In 2025, China's stainless steel production maintained steady growth, with 300-series stainless steel output from January to November increasing by 7.4% year-on-year (previous value: 8.5%). However, as a post-real estate cycle commodity, downstream demand has been weak due to the real estate downturn. Overall stainless steel inventory remains high, with slow destocking. Coupled with low profitability in primary nickel-based stainless steel production, stainless steel is unlikely to deliver outperformance in 2026.

Limited Share of Ternary Battery Vehicles
In 2025, new energy demand remained strong, with ternary precursor production returning to the high levels of 2022. As of November, ternary production increased by 11.41% year-on-year compared to 2024. However, the share of ternary batteries in new energy vehicle installations has remained below 20% since 2025, severely limiting demand growth in the new energy sector. According to TrendForce, all-solid-state batteries are still in the transition from prototype cells to engineering applications, with mass adoption in electric vehicles expected after 2030. Therefore, demand growth in the new energy sector in 2026 may be limited.

Electroplating, Alloys, and Special Steel Have Limited Impact
Electroplating, alloys, and special steel constitute the main downstream segments for refined nickel. Nickel demand for electroplating remains stable, with annual consumption around 43,000 nickel tons. Nickel consumption for alloys and special steel has grown steadily since 2021, with a five-year compound annual growth rate of 14%. However, this segment accounts for a relatively small proportion of total nickel demand, resulting in limited overall impact.

Policy Landscape
Indonesia's Policy Shift: Tighter Quotas and Cost Restructuring Drive Nickel Price Increases
At year-end, Indonesia signaled two key policy changes: First, a significant reduction in mining quotas, with the 2026 nickel ore mining quota (RKAB) target set at 250 million tons, down over 34% from 379 million tons in 2025. Second, an adjustment in pricing methodology, with plans to revise the nickel ore reference price formula to treat by-product metals such as cobalt as independent commodities and impose royalties.

If implemented, these policies will directly increase nickel ore mining costs by reducing supply and raising taxation. The cost structure of Indonesia's nickel industry is expected to shift upward systematically, transmitting through trade channels to the global market and serving as a key medium- to long-term factor supporting nickel prices.

2026 Summary and Outlook
In summary, the oversupply situation in nickel is well-established, with resource-side policies in Indonesia and the Philippines being the primary variables affecting fundamentals. Before Indonesia's policies are finalized, any production adjustments in Indonesia—which accounts for over 50% of global nickel supply—could significantly impact global supply-demand dynamics.

If Indonesia's policies are implemented, mining costs will rise systematically, and the room for cost reductions in domestic integrated processes will narrow, potentially solidifying the "floor" for nickel prices. The current price of around 130,000 yuan/ton is close to the breakeven point for most producers. On the demand side, new energy battery demand (particularly for high-nickel ternary batteries) is expected to recover in 2026, while destocking in the stainless steel industry nears completion, potentially providing a "floor" for nickel prices through downstream restocking.

However, recalling 2024, Indonesia's final approved quota exceeded initial targets, suggesting that policies may be "more talk than action." If 2026 quotas are not significantly reduced, nickel price gains may be limited.

Overall, if Indonesia implements its planned quota reductions and tax adjustments in 2026, nickel ore supply contraction will shift from "expectation" to "reality," coupled with rising costs, potentially pushing nickel prices toward the 140,000–150,000 yuan/ton range. Demand is not expected to improve significantly. The price center for nickel in 2026 is likely to shift upward, with prices potentially reaching 150,000 yuan/ton if policies are effectively implemented, or fluctuating around 130,000 yuan/ton if implementation falls short.