Key Moments
- Bernstein increased its 2026 nickel price target to $17,357 per metric ton as the firm now anticipates only a modest market surplus.
- Higher Indonesian costs and ore constraints pushed C1 cash costs at the 75th and 90th percentile to $17,870 and $18,650 per ton, well above 2025 levels.
- Combined LME and SHFE nickel inventories climbed to about 375,000 metric tons, or roughly 9% of 2025 mine output, while stainless steel demand is expected to grow around 5% year-over-year.
Bernstein Revises Nickel Price Outlook
Bernstein raised its 2026 nickel price target to $17,357 per metric ton, compared with an average forecast of $15,164 per ton for 2025. The firm cited a nickel market that now appears far more balanced than previously anticipated, with only a small surplus remaining, instead of the earlier consensus projections of more than 200,000 metric tons of excess supply at the start of the year.
Indonesia Reshapes Supply and Cost Structure
According to Bernstein, the key driver of this shift has been Indonesia, which has tightened ore availability, raised the industry cost base through higher HPM, and added more uncertainty to the commercial environment. As a result, C1 cash costs at the 75th and 90th percentile of the cost curve have risen to $17,870 per ton and $18,650 per ton, respectively. These figures are significantly above 2025 levels of $14,650 per ton and $15,300 per ton.
Bernstein highlighted that reports of the Indonesian government potentially increasing RKAB quotas in the July revision to about 300-350 million wet metric tons, compared with the initially announced 260-270 million, likely played a role in the decline in nickel prices in June.
| Metric | 2025 Level | Latest Level |
|---|---|---|
| Nickel price target (per metric ton) | $15,164 (average 2025) | $17,357 (2026 target) |
| C1 cash cost – 75th percentile (per ton) | $14,650 | $17,870 |
| C1 cash cost – 90th percentile (per ton) | $15,300 | $18,650 |
Geopolitics, Sulphuric Acid Tightness, and HPAL Output
Bernstein pointed to the Iran-US/Israel conflict as a factor tightening the sulphuric acid market, a critical input for the HPAL process. This has prompted production cuts at Indonesian HPAL operations, as granular sulphur prices jumped from below $600 per ton to around $1,000 per ton.
The firm noted that as supply conditions normalize, especially once a peace agreement is reached and sulphuric acid availability improves, some of the current cost pressure on producers could ease.
EV and Battery Trends Weigh on Demand Dynamics
On the demand side, global electric vehicle sales for the year-to-date period through April increased by only 0.5% year-over-year. Within that, battery electric vehicle sales grew 5.1%, while plug-in hybrid sales declined 8.5%.
LFP chemistry, which does not require nickel, continues to dominate both the EV and energy storage segments. At the same time, sodium-ion batteries are described as a potential new source of demand over the coming years, as their costs are expected to reach parity with LFP by the end of 2026.
Inventories, Stainless Steel, and Structural Demand
Combined LME and SHFE nickel inventories have increased to around 375,000 metric tons, which Bernstein equates to approximately 9% of 2025 mine production.
Despite the build-up in exchange stocks, underlying demand is still supported by stainless steel, which remains the primary first-use outlet for nickel. Stainless steel demand is expected to expand by about 5% year-over-year.
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