A recent UBS report indicates that despite announced production cuts and postponed new capacity projects, the global nickel market is likely to remain oversupplied until 2026. Analysts expressed that the market already experienced a significant surplus between 2022 and 2024, and while this surplus is expected to narrow over the next two years, it will still lead to a further increase in London Metal Exchange (LME) refined nickel inventories.

The report suggests that nickel demand is unlikely to rebound significantly in the short term, primarily due to declining stainless steel production and a sluggish recovery in demand for nickel used in batteries. On the supply side, despite project delays and capacity closures starting in 2024, supply growth is projected to slow from 10% in 2021-2023 to 7% in 2024 and below 5% from 2025. However, Indonesia continues to actively expand new capacity, limiting the effectiveness of rebalancing.

Looking ahead, UBS expects global nickel demand to grow by approximately 4% to 5% annually from 2025 to 2028. While this is lower than the 9% growth rate from 2021 to 2024, it remains robust. Analysts believe that cost pressure and potential production cuts will support nickel prices, but the overall market will remain in a state of oversupply.