Nickel: Cycles

The metal with some of the wildest price swings

Nickel prices swing hard. They rose from about $5,945 a tonne in 2001 to $37,216 in 2007, as Chinese stainless demand met a supply-starved market (Humphreys). The monthly high since 2000 is $52,179. The supply response, first nickel pig iron and then Indonesian laterite, flattened prices. September 2026 stood at $16,324, 8% above a year earlier but 16% below five years earlier. In real 2010 dollars, 2025 averaged $13,060, against $21,809 in 2010. The ten-year high of $33,924 reflects the 2022 LME squeeze.

Nickel price

Chart: Nickel monthly price

Chart: Nickel annual real price

US price, LME cash, annual average

Super-cycles in nickel

Nickel has the sharpest booms of the base metals because supply is lumpy and stainless demand is cyclical. Real prices have fallen over the long run: in 2010 dollars nickel averaged $21,809/t in 2010 and $13,060/t in 2025 (World Bank). Each spike has been followed by a supply response that reset the cost curve lower: Chinese nickel pig iron after 2007, then Indonesian RKEF and HPAL after the 2014 and 2020 ore export bans. The market was in surplus every year from 2022 to 2025 (INSG). Indonesia's 2026 quota cut shows prices now depend partly on one government's supply policy.

1. 1987-1989

   A late-1980s recovery in Western industrial and stainless demand met supply that had been cut back in the early-1980s slump. Prices spiked, then fell as supply returned and the early-1990s recession arrived.

   World Bank monthly average rose from $3,525/t (Jan 1987) to $18,524/t (Feb 1989), then the annual average fell to $5,293/t by 1993.

2. 2003-2008

   China's stainless boom met a market starved of investment after years of low prices. China's refined nickel imports rose from 11,600 t (2000) to 116,900 t (2008). The response was nickel pig iron made in idle Chinese blast furnaces from Philippine and Indonesian ore.

   World Bank annual average rose from $5,945/t (2001) to $37,230/t (2007); monthly average peak $52,179/t (May 2007), then $9,686/t (Dec 2008).

3. 2011-2016

   NPI output in China reached 482,000 t in 2013, over a third of world supply, and RKEF cut its cost from over $20,000/t to near $12,000/t. Indonesia's 2014 ore export ban only briefly lifted prices before Chinese stocks and new Indonesian smelters caught up.

   World Bank monthly average fell from $28,252/t (Feb 2011) to $8,299/t (Feb 2016), a 71% drop.

4. 2021-2022

   Battery-demand hopes, post-Covid recovery and Russia's invasion of Ukraine tightened the Class 1 market. A large short position held by Tsingshan triggered an LME squeeze; prices rose up to 250% in two days and the LME suspended trading for a week and cancelled trades.

   Monthly average $33,924/t in March 2022 (World Bank), up from $18,465/t average in 2021.

5. 2023-2026

   Indonesian NPI, matte and MHP flooded the market; INSG surpluses reached 283 kt in 2025. Western mines in Australia and New Caledonia closed. In 2026 Indonesia cut the RKAB ore quota to 260-270 Mt and INSG forecast a small deficit.

   World Bank monthly averages: low $14,671/t (Nov 2025), then a rally to $18,806/t (May 2026); $16,324/t in Sep 2026.

What drives the cycle

• Chinese and Indonesian stainless steel output. Stainless takes about two-thirds of nickel, so melt-shop output in China and Indonesia sets most of demand.
• Indonesian state policy. Export bans, RKAB ore quotas, the HPM benchmark ore price and royalties decide how much of 60%+ of world supply reaches market.
• Battery chemistry mix. Each EV with an NMC battery uses 40-60 kg Ni; LFP uses none. The NMC versus LFP split decides whether batteries are a growth engine.
• Cost curve of Indonesian routes. HPAL at about $9,800/t and RKEF at $9,000-12,000/t set the floor; ore, coal and sulphur prices move that floor.
• Class 1 versus Class 2 spread. The LME contract is for pure metal, but most supply is NPI and intermediates. Conversion capacity links the two and can create squeezes.

Metrics to track