Production quotas control nickel price: Nickel Q1 2026 Price Review

The nickel market experienced a relatively volatile first quarter in 2026 as metal prices rallied on the back of supply-side concerns. Prices for Benchmark’s EXW China nickel sulphate price grade rose by 18.6% throughout the quarter, responding to supply concerns from Indonesia and a broader battery metal price rally.

In early January, rumours surrounding tighter Indonesian RKAB nickel ore production quotas lifted metal prices as well as elevating nickel sulphate and MHP prices too. Supply concerns deepened later in the month as the quotas were formally announced as near-term ore availability was pulled into question, keeping nickel prices supported and MHP payables firm.

Market players were clear, however, that this was not a demand-led rally, with prices largely tracking gains in the LME nickel metal price rather than any clear improvement in nickel-based chemistry battery demand. From mid-January, midstream players resisted higher sulphate prices to protect margins, whilst downstream consumers mostly adopted a wait-and-see approach, viewing the rally as disconnected from prevailing market fundamentals.

Throughout February, prices softened as LME nickel retreated amidst a broader commodity sell-off, whilst the CNY period constrained market activity with several consumers temporarily offline. Even so, feedstock prices did not fall sharply, as limited MHP availability, cobalt supply tightness and the dominance of long-term contracts kept payables elevated.

Despite the Indonesian government disclosing that it plans to supplement the initial RKAB production quotas in July, March brought a somewhat firmer tone. This robustness stemmed from Middle Eastern sulphur supply concerns for HPAL operations, ongoing ore tightness, and disruptions in Madagascar and Cuba, which maintained resilient prices. Even so, the demand backdrop remained underwhelming and most market players saw little evidence of a near-term recovery in nickel-based battery chemicals consumption.

Overall, Q1 2026 was defined less by improving downstream demand than by recurring supply-side risks, thin spot liquidity and continued sensitivity to Indonesian policy and broader macro sentiment.

This is the second in a series of articles looking at Q1 2026 critical mineral price trends. The rest of the series can be found below (will be updated as more are released):

Volatile, yet robust: Lithium Q1 2026 Price Review