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The International Nickel Study Group (INSG) has reversed its view of the nickel market. After a meeting of member governments and industry representatives in Lisbon on 13–14 October, the group now expects 2026 to close with a small surplus rather than the 32,000-tonne deficit it forecast in April — a deficit that would have been the first annual shortfall since 2021.
More significantly for stainless steel buyers, INSG expects the surplus to widen to 70,000 tonnes in 2027. That points to a market that stays comfortably supplied for the medium term, with direct consequences for 300-series stainless pricing.
INSG’s Revised Forecast
| Метрическая | 2026 | 2027 |
|---|---|---|
| Global primary nickel demand | ≈ 3.85 million t (+7.6% YoY) | ≈ 4.00 million t |
| Global nickel production | ≈ 3.87 million t | ≈ 4.07 million t |
| Market balance | Surplus ≈ 19,000 t | Surplus ≈ 70,000 t |
For comparison, INSG’s April assessment had pointed to 2026 demand of 3.75 million tonnes against production of 3.72 million tonnes — a 32,000-tonne deficit. Both demand and supply have since been revised upward, but supply has been revised by more.
What Changed Since April
Two revisions explain the swing.
First, demand was stronger than expected. INSG now sees 2026 demand growing 7.6% year on year to about 3.85 million tonnes, driven largely by stainless steel output. That is a meaningful upgrade from the April figure of 3.75 million tonnes.
Second, supply rose faster still. Production is now estimated at 3.87 million tonnes against 3.72 million tonnes previously forecast. The combination turns a modest deficit into a modest surplus.
The revision is a reminder that nickel balances are unusually sensitive to short-term changes in Indonesian and Chinese output — a 150,000-tonne upgrade to production is enough to erase a 32,000-tonne deficit several times over.
Why the Surplus Is Growing
INSG’s outlook rests on a tug-of-war between two demand drivers pulling in opposite directions.
Stainless steel: still the foundation
The stainless steel sector is expected to expand further in the second half of 2026 and throughout 2027, continuing to underpin nickel demand. Stainless accounts for the majority of global nickel consumption, and 300-series grades — 304, 316L, 321 — typically contain between 8% and 14% nickel. When stainless mills run at high utilisation, nickel demand follows.
EV batteries: growth, but slower than hoped
Nickel’s second major demand story has lost some momentum. Competition from lithium iron phosphate (LFP) batteries has meant that nickel use in electric vehicle batteries is growing more slowly than previously expected. LFP chemistry contains no nickel at all, and its cost advantage has made it the default choice for many mass-market vehicle segments, particularly in China.
The result is a market where stainless demand is solid but the battery demand story no longer provides the same upside it did a few years ago — while supply, especially from Indonesia, keeps expanding.
Indonesia: The Swing Factor
Indonesia is the world’s largest nickel producer, and its policy decisions are now the single most important variable in the global balance. According to INSG:
- 2026 ore production quota is lower than the previous year.
- 2027 quota applications can be submitted until 15 November.
- Supply-side policy therefore remains the key variable for the market.
A lower quota does not automatically mean lower output — Indonesian producers have consistently found ways to process lower-grade ore and expand capacity — but it does introduce uncertainty. Any tightening of Indonesian supply would work against the surplus scenario; any further expansion would reinforce it.
What It Means for Stainless Steel Prices
Nickel is not the largest cost component in a stainless steel pipe, but it is the most volatile one. In a 304 seamless pipe, nickel typically represents 60–70% of the raw material cost, which is why the LME nickel price shows up so directly in mill quotations.
A persistent surplus does not guarantee falling prices. It does, however, change the balance of risk:
- Downward pressure on the alloy surcharge. With the market in surplus, mills have less justification for aggressive surcharge increases.
- Reduced urgency for panic buying. When supply is comfortable, buyers are less exposed to sudden allocation.
- More room for grade substitution. A wide nickel surplus keeps the price gap between 300-series and alternatives visible, which makes duplex and 200-series more attractive in suitable applications.
Buying Strategy for 2027
A surplus forecast is not a reason to delay every purchase, but it does support a more measured approach:
- Index your contracts. Where possible, tie pricing to a published nickel or alloy surcharge index rather than accepting fixed quarterly increases.
- Review grade selection. If your application allows 2205 дуплекс из нержавеющей стали, its higher strength and lower nickel content can reduce total cost per metre even at the same tonnage price.
- Watch the 15 November Indonesian quota deadline. It is the most likely trigger for a short-term price reaction.
- Keep lead times in view. Raw material availability and mill scheduling affect delivery more than the nickel balance does on a month-to-month basis.
KAYSUNS publishes grade and specification guidance for трубы из нержавеющей стали а также nickel alloy pipes, and can advise on grade substitution where nickel content is a significant cost driver.
ЧАСТО ЗАДАВАЕМЫЕ ВОПРОСЫ
What is the INSG?
The International Nickel Study Group is an intergovernmental organisation that brings together member governments and industry representatives to publish independent statistics and forecasts on nickel production, consumption and trade.
Does a nickel surplus mean stainless steel will get cheaper?
Not automatically. Nickel is one input among several — chromium, iron, molybdenum and energy all matter — and mill margins, freight and demand also move prices. A surplus generally reduces upward pressure rather than guaranteeing a decline.
Why did INSG change its 2026 forecast?
Because both demand and production estimates were revised upward, with production rising more than demand. Demand is now seen at about 3.85 million tonnes and production at about 3.87 million tonnes.
How much nickel is in 304 stainless steel?
Type 304 typically contains 8–10.5% nickel, while 316L contains 10–14%. This is why 300-series pricing tracks nickel so closely.
What happens if Indonesia cuts its 2027 quota?
A meaningful cut would tighten supply and could reduce or reverse the projected surplus. The 2027 quota application window closes on 15 November, so the market will have clearer visibility after that date.
Plan Your 2027 Stainless Steel Purchasing With KAYSUNS
KAYSUNS supplies stainless steel pipes, fittings, flanges and nickel alloy products to industrial buyers worldwide, with material certificates to EN 10204 3.1 and compliance with ASTM, EN and JIS standards. If you are reviewing grade selection or building a 2027 purchasing plan, send your specification and annual volume to [email protected] and our team will help you evaluate the most cost-effective option.
