Supply squeeze and elevated raw material costs lift prices: Nickel Q2 2026 Price Review

The nickel market experienced a mixed second quarter in 2026, as supply-side constraints supported intermediate prices while weaker LME nickel prices and cautious downstream demand limited further gains.

Benchmark’s EXW China nickel sulphate price rose by 4.8% between April and June, from RMBT 31,250/tonne ($4,594) to RMB 32,750/tonne ($4,847). Mixed hydroxide precipitate (MHP) prices increased by 7.8% over the same period, with aggregate prices reaching $9,045/tonne.

“Overall, Q2 was characterised by tight upstream supply and cost pressure stemming from elevated sulphur costs and policy uncertainty, rather than a meaningful recovery in nickel demand,” said Frederick Bloomfield, a senior price analyst Benchmark. “Prices ended the quarter supported by heightened raw material costs and supply risks, but face a more bearish outlook for Q3 where supply constraints are expected to be at least partially alleviated.”

Middle east conflict pressures sulphur supply

In April, higher sulphur prices linked to the ongoing Middle East conflict, combined with tighter Indonesian ore supply from reduced RKAB production quotas, increased costs for nickel intermediates, forcing curtailed production and supporting MHP Ni payables. However, expectations that additional Indonesian Rencana Kerja dan Anggaran Biaya (RKAB) quotas would be issued in July moderated longer-term bullishness.

Nickel sulphate prices, by contrast, softened slightly, as downstream buyers remained cautious and market participants questioned the sustainability of the price strength.

Payables up in May

Market conditions became more supportive to pricing in May as high-pressure acid leach (HPAL) project utilisation rates in Indonesia continued to be limited by sulphur shortages and ore shortages, while some producers held back MHP material in anticipation of further nickel price gains. These factors tightened spot availability and pushed MHP payables higher, with levels reaching 92.0–95.0% by 20 May. Nickel sulphate prices also strengthened to RMB 33,500–34,500/tonne ($4,925-5,072) as producers attempted to restore margins amid elevated feedstock and sulphur costs.

The new Indonesian Harga Patokan Mineral (HPM) nickel ore pricing policy was a further source of uncertainty. Market participants held divergent views on the extent to which this would be applicable, particularly for limonite ore. The updated formulae have yet to be widely adopted in domestic transactions. As a result, the policy provided some support to upstream pricing expectations but did not produce a uniform or immediate increase in intermediate prices.

Caution grew at close of quarter

By June, the market had begun to lose momentum. LME nickel prices retreated, weighing on MHP and nickel sulphate prices, while precursor production remained broadly stable. Domestic Chinese sulphate prices fell to RMB 32,750/tonne ($4,847) by June, from highs of RMB 34,500/tonne ($5,072) in May as buyers anticipated weaker conditions at the start of Q3 and adopted a more cautious procurement strategy.

Despite this, tight MHP supply continued to support Ni payables, which remained largely flat in June at 93.0-93.5%. Sulphur-related disruption weighed on MHP output, leading Chinese sulphate refiners to increasingly turn to nickel matte as their feedstock material of choice.