Nickel prices are expected to remain high throughout 2026, driven by Indonesia's ongoing production cuts and supply disruptions caused by the war in Iran, according to S&P Global Energy analysts [1]. Indonesia, the world's largest nickel producer, is implementing output reductions to stabilize and increase global prices, with Jakarta's pricing policy exerting significant influence on the supply chain [1]. The conflict in Iran has further strained the market by disrupting sulfur shipments, a key ingredient in nickel processing, leading to a global sulfur shortage and sharply rising input costs for refiners and battery manufacturers [1].
S&P analysts noted that unless there is a quick resolution in the Middle East or a change in Indonesian policy, nickel prices are likely to remain at current high levels throughout the year [1]. While no specific price targets were provided in the analyst report, recent trading has seen benchmark nickel futures on the London Metal Exchange (LME) holding above $20,000 per metric ton, representing a sustained rally from last year's lows [1]. Technical analysts have identified primary resistance for nickel futures at $22,000 per metric ton and support at $19,000, suggesting that a break above resistance could trigger further speculative buying, while increased Indonesian output or a resolution in Iran could prompt a price correction [1].
The elevated nickel prices are expected to impact battery manufacturers and electric vehicle supply chains, as nickel is a critical component for lithium-ion batteries [1]. The current market dynamics highlight the strategic importance of supply chain diversification and effective geopolitical risk management in the commodities sector [1].
CONCLUSION
Nickel prices are set to remain high due to Indonesia's production cuts and the Iran war's impact on sulfur supply, with benchmark futures trading above $20,000 per metric ton. Market participants are closely monitoring geopolitical developments and Indonesian policy for potential shifts in price direction.