Nickel Breaks Out as Indonesia Holds Firm and Supply Tightens

• Nickel prices have broken out of a US$16,000-17,000/tonne range as Indonesia confirms no near-term change to its 2026 mining quotas, undercutting a wave of speculation that Jakarta would cave to pressure.
• Philippine ore output is set to halve quarter-on-quarter through the second half of 2026, a seasonal monsoon effect that CEO Mark Selby says will squeeze nickel pig iron feedstock and support downstream prices.
• Bernstein has raised its 2026 nickel price forecast and now expects a small deficit this year, though Selby argues most analysts still understate the extent of the supply shortfall building for 2027 and beyond.
• Battery-grade nickel demand growth has settled at a mid-to-high single-digit pace as the post-2021/22 destocking cycle ends, while a thin pipeline of advanced projects leaves little visible new supply outside Indonesia.
• Canada Nickel's Crawford project has reached the final stage of federal permitting, with the environmental review sent to the minister for a 30-day decision window, on track to become the first project permitted under Canada's 2019 Impact Assessment Act.

The nickel price has broken out of the US$16,000-17,000-a-tonne range it had been stuck in for weeks, and Mark Selby, CEO of Canada Nickel Company (TSXV:CNC), says the catalyst is as much about what didn't happen as what did. Speaking on the Battery Show, Selby walked through the metal's price action, an important test of Indonesian nickel policy, the demand picture heading into the second half of 2026, and a round-up of corporate developments across the battery-metals space - including Canada Nickel's own Crawford project.

Nickel Breaks Out as Indonesia Holds the Line on Quotas

Nickel has pushed through technical resistance after a bounce back from its recent range, and Selby is unequivocal about the trigger. Indonesia's Energy and Mineral Resources Ministry confirmed this week that it is not making major changes to its mining quotas, closing off a narrative that had built through June, when short-sellers and some Chinese commentary suggested Jakarta would cave to pressure and loosen supply.

"This was really one of the next important tests for Indonesia, whether they were going to stand up and be resolute ... for all those people who think Indonesia is going to fall over, this was a pretty important test, and they've stood up to do it."

Selby frames 2026 as the year sentiment in the nickel market turns, though not overnight. Bernstein, one of the leading independent equity research houses, has raised its 2026 nickel price forecast and now expects the market to run a small deficit this year. Selby argues the broader analyst community will take the rest of the year to catch up: most have only shifted from forecasting a large surplus to a small deficit for 2026, while still penciling in surpluses returning in 2027 and 2028 - a call he thinks understates how little new supply is actually coming, given Indonesia isn't adding meaningful production and few other projects are scheduled to reach the market.

Supply-Side Tightness: Philippine Ore, Sulphuric Acid and the NPI Squeeze

The clearest signal of tightening supply, in Selby's view, is what's about to happen in the Philippines. Philippine nickel ore output is driven by monsoon weather and follows the same seasonal pattern every year:

"Philippines is again just driven by monsoon weather ... they produce about half of the [ore] that they produce [anually] in just one quarter, which was the quarter that we just finished, the second quarter. Generally, mine output in the Philippines drops by half into the third quarter and drops by half again into the fourth quarter."

That matters because Philippine ore feeds nickel pig iron (NPI) production, the dominant source of nickel units for stainless steel. Chinese producers have historically drawn on inventory to smooth these seasonal swings, but Selby says in-process stockpiles are being drawn down, meaning the seasonal drop-off should flow through more directly to downstream prices this time.

Adding to the input-cost picture, sulphuric acid prices - a key cost in HPAL (high-pressure acid leach) processing - had eased as the conflict in the Gulf region quieted, but are ratcheting back up now that fighting has resumed and looks set to persist. Selby says he isn't concerned about nickel prices retreating to the US$16,000-17,000 range because the underlying indicators - stainless steel prices, NPI prices, the discount of NPI to LME nickel, and premiums for MHP (mixed hydroxide precipitate) - are only around 5% off their highs for the year and continue to point to a tight physical market, even with a build of exchange inventory on the London Metal Exchange (LME).

EV and Battery Demand Trends

On the demand side, EV sales remain healthy, and Selby says the more important story is the end of a three-year destocking cycle that followed the heavy 2021–22 stockpiling in nickel, cobalt and lithium. With those inventories largely worked through, nickel demand into EVs is growing at a mid-to-high single-digit pace, while lithium prices are up 30–40% year-to-date as restocking pulls material back into the battery supply chain. Selby expects that pace of demand growth to moderate rather than persist at current levels.

Beyond batteries, Selby points to broad-based industrial demand that has driven roughly 7% annual nickel demand growth every year since 2019: defence and oil-and-gas alloy use, an eventual recovery in Boeing aircraft production, and infrastructure build-out across India, Southeast Asia and the Middle East. Against that demand backdrop, he says the visible supply pipeline of advanced projects capable of reaching meaningful scale is thin - essentially Indonesia, plus a handful of developers including Centaurus Metals (ASX:CTM) in Brazil, Lifezone Metals (NYSE:LZM) in Tanzania, Talon Metals (TSX:TLO) in Michigan and Minnesota, FPX Nickel (TSXV:FPX) in British Columbia, and Canada Nickel itself in Ontario.

Corporate Developments

Canada Nickel: Crawford Project Nears Final Permit Decision

Canada Nickel's flagship Crawford project has reached what Selby calls its final regulatory step: the environmental permit conditions have been published and sent to the federal minister for final approval, who has 30 days to decide. Selby notes the minister's office completed the prior review phase in roughly half the allotted time, and he's hopeful the same pace applies here. Crawford would be the first project permitted under Canada's 2019 federal Impact Assessment Act.

"We're the first [mining] project to be permitted under this 2019 legislation in Canada, and the fact that we were able to get from fifth drill hole to this point in just under seven years is ... lucky to have a good team ... that's able to make that happen."

First Atlantic Nickel & Cobalt: Deepest Step-Out Hole to Date

Selby also flagged a step-out at one of the other regional exploration targets he follows, in the deepest hole drilled at the property to date, returning substantial awaruite mineralisation. The key open question, he said, is metallurgical: test work is still needed to demonstrate what recoveries look like from that awaruite-hosted material before the economics can be assessed.

Talon Metals: Permitting Progress and a New Exploration Target

Talon Metals (TSX:TLO) provided a mid-year update, continuing to work through the public-comment phase of its environmental review for the Tamarack nickel-copper project in Minnesota. Selby also highlighted the upside from Talon's Michigan land package, acquired alongside the former Lundin Mining-owned Eagle Mine and its associated Humboldt Mill: with that processing infrastructure now under Talon's control, the company has started drilling a nearby target with the option of feeding any discovery through the existing mill.

Key Takeaways

Indonesia's decision to hold its 2026 mining quotas steady removes one of the market's biggest near-term downside risks, and Selby argues it should force the analyst community to keep revising nickel price forecasts higher through the rest of the year as the reality of a tightening market sets in. The seasonal drop in Philippine ore output, resurgent HPAL input costs, and a thin pipeline of advanced nickel projects outside Indonesia all point the same direction on the supply side, while demand growth - EV-led but not EV-dependent - continues at a high single-digit pace. On the corporate side, Canada Nickel's Crawford project is within weeks of a landmark permitting decision, alongside exploration progress at First Atlantic Nickel & Cobalt and permitting/exploration advances at Talon Metals. It's worth noting this commentary comes from a company executive with a direct financial interest in the nickel price and in the fortunes of peer companies he discusses - readers should weigh his outlook alongside independent market data and their own research rather than as disinterested analysis.

TL;DR

Nickel broke out of its US$16,000–17,000/tonne range after Indonesia confirmed no major changes to 2026 mining quotas, undercutting speculation that Jakarta would loosen supply. Canada Nickel CEO Mark Selby says Bernstein has raised its 2026 nickel forecast to a small deficit, while seasonal Philippine ore declines, rising HPAL input costs and a thin project pipeline point to further tightening. EV demand growth has settled at a mid-to-high single-digit pace as post-2021/22 destocking ends, and broader industrial demand keeps nickel growing around 7% annually. Canada Nickel's Crawford project awaits a final federal permitting decision within 30 days, while First Atlantic Nickel & Cobalt and Talon Metals both reported exploration and permitting progress.

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