Short-Term Noise, Long-Term Strength: Why Nickel’s Outlook Remains Bullish

Recording date: 7th July 2026Nickel prices have recently weakened, pressured by a stronger US dollar and market speculation that Indonesia may expand mining quotas. However, industry insights suggest this decline reflects short-term dynamics rather than a fundamental shift in supply-demand balance. According to Canada Nickel CEO Mark Selby, the current pricing environment coincides with peak seasonal ore supply from the Philippines, a period when market participants—particularly Chinese buyers and short-sellers—may attempt to push prices lower. As supply typically tightens later in the year due to seasonal factors, Selby expects underlying fundamentals to reassert upward pressure on prices.Despite softer headline prices, several indicators point to tightening conditions within the nickel supply chain. A notable example is the drawdown of approximately 40,000 tons of nickel pig iron (NPI), which has been converted into higher-value nickel matte for battery production. This shift has reduced the historical price discount between NPI and London Metal Exchange nickel from about $250/mtu to $150/mtu, signaling stronger demand and constrained supply in certain segments.Demand for nickel in electric vehicle (EV) batteries remains a key growth driver. Year-to-date, battery-related nickel demand has risen by 37%, significantly outpacing EV sales growth of around 2%. This divergence is largely attributed to a 12% increase in average battery pack size, as consumers increasingly favor larger vehicles that require more nickel-intensive batteries.On the corporate front, Canada Nickel has signed a memorandum of understanding with German energy company RWE to develop supply chains for low-carbon nickel products targeting Europe’s steel industry. Meanwhile, peers such as Magna Mining and Sherritt International are navigating investment shifts and operational challenges.Overall, while short-term volatility persists, structural demand growth and supply constraints continue to support a constructive long-term outlook for nickel.Sign up for Crux Investor: https://cruxinvestor.com