• Nickel prices held a narrow range of $17,000 to $17,800 per tonne through March 2026, outperforming other base metals that fell by double digits during the same period, serving as a key resistance point tied directly to Indonesian royalty rate increases that incentivise Chinese producers to suppress prices.
• Input costs across the nickel supply chain are rising sharply and simultaneously, with ore prices up nearly $2,000 per tonne in production costs, sulphur prices rising 50% roughly affecting for HPAL producers, and coal prices under upward pressure from Indonesian supply management, collectively pushing the global cost curve materially higher.
• Western governments are moving from rhetoric to capital deployment on critical mineral security, with the US Defense Industrial Base Consortium naming nickel among a dozen priority commodities in a recent funding round that can extend to allied nations including Canada, and new Canadian federal critical mineral funds becoming eligible for deployment from April 1st under the new fiscal year.
• Institutional investor interest in nickel is growing following the rare earth sector's sharp repricing, with generalist investors actively scanning the sector for comparable macro-driven opportunities, while notable capital market participation in private placements signal renewed smart-money attention to the space.

The nickel market entered April 2026 in a state of considerable tension. Prices have been broadly stable, yet the underlying cost structure of the industry is shifting materially. The Iran conflict introduced a secondary wave of commodity inflation through energy and chemical inputs, and Indonesia which accounts for roughly two-thirds of global nickel supply continues to exercise deliberate production discipline.

Canada Nickel CEO Mark Selby offered a detailed assessment of where the nickel market stands, what is driving structural cost inflation, and what the company's recent permitting and infrastructure milestones mean for its path to production.

Nickel Prices Resilient but Capped at $18,000

Nickel prices spent much of March in a narrow band between $17,000 and $17,800 per tonne. While that range represents relative stability compared to double-digit percentage declines seen in other base metals during the same period, it also reflects a ceiling that has proven difficult to breach. The $18,000 level is not simply a psychological threshold, it is the point at which Indonesian royalty rates increase, creating a structural incentive for major Chinese producers operating in the country to manage supply and pricing so as to remain just below it.

Selby noted that the timeline for a more sustained price move has been pushed back somewhat by the geopolitical noise around the Middle East conflict, but the underlying trajectory remains intact. The question is not whether prices will move higher, but when momentum returns to carry them through that key resistance level.

Ore, Sulphur, and Coal Pushing the Cost Curve Higher

Perhaps the most significant development in the nickel market over the past month has been the accelerating cost pressure facing Indonesian producers, which in turn has structural implications for where the global cost curve sits.

Selby put the broader cost dynamic plainly:

"The whole cost base has moved so much. No one's (in Indonesia) really making any more money just because there's been such a big cost push all the way through the system."

Ore prices across most grades increased by $10–$15 per tonne during March, representing a 15–20% rise. Translated into nickel equivalent terms, that amounts to nearly $2,000 per tonne of additional production cost. While the end of the Philippine rainy season has begun to ease ore prices modestly, NPI and stainless prices have remained elevated despite broader sell-offs in other metals, reflecting just how embedded the cost inflation now is throughout the supply chain.

Sulphur costs have been particularly acute. Indonesia sources approximately 75% of its sulphur requirements from the Gulf region, and with the Iran conflict tightening energy and chemical supply chains, sulphur prices rose by approximately $250 per tonne in March alone, a roughly 50% increase within a single month. Given that HPAL processing requires around 12 tonnes of sulphur per tonne of nickel produced, that translates directly into approximately $3,000 per tonne in additional cost for operations.

Coal prices are also under upward pressure. Indonesia has been managing domestic coal supply partly for policy reasons unrelated to the conflict, and the energy disruption from the Middle East has further constrained any potential relief. NPI producers, which are major consumers of coal-fired energy, are absorbing meaningful cost increases on that front as well.

Mark Selby, CEO of Canada Nickel Corp

Government Engagement & Institutional Interest: A Changing Landscape

Selby emphasised that what is unfolding in the Middle East is accelerating a shift that was already underway: the move by Western governments from policy statements about critical mineral security to actual capital deployment. He drew a direct parallel between Western energy dependence on the Middle East and strategic mineral dependence on China,

"What's happening right now underscores, and is just a very violent reminder to all those governments that have been talking about critical minerals, saying we need to get off Chinese dependency. And the market is finding out again the hard way that if you're dependent on one region for supply of something important to your economy, you put your economy at significant risk."

On the US front, Selby reported Canada Nickel renewed engagement with the Department of Defense's Defense Industrial Base Consortium, which recently ran a short-fuse funding round specifically naming nickel among a dozen priority commodities. Unlike Department of Energy funding, which is restricted to US-soil assets, defence-industrial funding can flow to allied nations, meaning Canadian projects like Crawford could be eligible. Selby noted that key personnel changes within the US government's critical minerals team roughly 18 months ago have resulted in a more operationally focused approach.

Alongside government activity, Selby observed a shift in institutional investor behaviour. Generalist institutional investors who largely missed the rare earth rally of recent months are now actively scanning other commodity sectors for comparable macro-driven opportunities, creating a potential new demand source for well-positioned nickel equities as the year progresses.

Federal Permitting and Infrastructure Milestones

Canada Nickel Corporation has continued to advance its Crawford Nickel-Cobalt Sulphide Project in Ontario through key development milestones. The company completed the second phase of the federal permitting process, placing it on track to receive its main federal environmental permit this summer. Selby noted that the federal permitting environment in Canada has improved materially over the past decade, and the team's prior experience navigating that process has helped streamline the timeline. A summer permit award would represent a significant de-risking event for the project.

Equally important from a development timeline perspective, Canada Nickel has commenced the engineering phase for its grid power connection with Hydro One, the provincial utility, at a substation south of Timmins. Power connection is a long-lead item in any large-scale mining project, and beginning engineering work now reflects the company's confidence in its permitting trajectory and its intent to be positioned for a construction decision.

The project also received a public shout-out in the Ontario provincial budget, where it was named among three projects referenced in the context of the province's expedited permitting framework. Selby and his team met with several provincial ministers following the budget announcement, reflecting the political visibility the project now carries at the provincial level.

With Canada's new federal fiscal year beginning April 1st, several critical minerals funds established by the federal government last November became eligible for deployment. While government disbursements take time, Selby expects tangible announcements from these funds to materialise through the latter half of 2026, adding another potential funding catalyst for qualifying projects.

Notable Developments Across Nickel Equities

Several other developments across the nickel sector merit investor attention.

Nusa Nickel is preparing to go public on the TSX via a reverse takeover during the second quarter of 2026. Its primary asset is an Indonesian nickel mine, which would make it the only TSX-listed vehicle offering direct exposure to Indonesian nickel mining operations. Key variables to assess include the grade and cost structure of the asset, its government-issued production quota under Indonesia's supply management regime, and the mining practices and ownership structure in place. The story is early-stage, but its uniqueness as a listed vehicle in this jurisdiction is notable.

Talon Metals announced additional drill results from its Vault Zone discovery, including 10 to 20 metre stepouts with what Selby described as spectacular multi-percent grade intervals. Selby noted the company is providing detailed disclosure to give investors the information needed to assess scale, though the ultimate size of the mineralised system remains to be determined.

Sherritt International closed a $50 million private placement with Seymour Schulich, co-founder of Franco Nevada alongside Pierre Lassonde, participating as a core investor. Schulich is not a frequent public presence in the mining markets, and his involvement in a nickel-leveraged capital raise is an event worth noting given his track record of identifying commodity cycles.

NexMetals reported drill results from depth extensions at its Selebi project and reassay work at the lower-grade Selkirk deposit, with results including 19 metres grading approximately 2% copper and 1% nickel. The company continues to advance both assets, with Selkirk carrying meaningful copper alongside its nickel component.

The Investment Thesis for Nickel

• Supply discipline is structural, not cyclical. Indonesia controls approximately two-thirds of global nickel supply and is actively managing ore quotas and royalty structures to support prices. This is policy-driven, not market-driven, which makes it more durable.
• The cost floor is rising. Ore prices, sulphur costs, and coal prices have all increased materially in recent months. This compresses margins for high-cost producers and sets a higher floor for where nickel prices need to trade for the industry to function sustainably.
• Sulphide and polymetallic assets have a structural cost advantage. HPAL and NPI producers face the most acute exposure to energy and chemical input cost inflation. Sulphide producers and those generating meaningful byproduct credits are better insulated and increasingly differentiated within the sector.
• Western government capital is beginning to flow. Multiple government funding mechanisms are now active or becoming eligible for deployment. Projects in Canada and other allied jurisdictions with direct relevance to critical mineral security are realistic candidates for non-dilutive or co-investment capital.
• Institutional investors are entering. Generalist institutional capital largely missed the rare earth move. Nickel, with a clear national security narrative, active government support, and a tightening supply picture, is increasingly on institutional radar, a meaningful demand source for quality equities.
• The $18,000 level is the near-term catalyst to watch. Breaking through this threshold would represent a royalty-rate inflection in Indonesia and signal to analysts that a more significant upward revision cycle is warranted.
• Selective exposure matters. Not all nickel equities benefit equally. Focus on low-cost producers, sulphide-hosted deposits with established infrastructure pathways, and development-stage assets with credible permitting timelines and government engagement. Avoid high-cost laterite and HPAL stories with significant unhedged exposure to energy and sulphur inputs.

Nickel in a New Strategic Commodity Cycle

The nickel market in early 2026 is being shaped by a convergence of forces that extend well beyond traditional commodity supply and demand. The Iran conflict has acted as an accelerant on trends that were already building specifically the vulnerability of industrial economies to geographically concentrated supply chains. For nickel, that concentration runs through Indonesia on the supply side and through Gulf-region chemical inputs on the cost side. Both are now being disrupted simultaneously, creating a cost and supply dynamic that is structurally supportive for prices at materially higher levels than those seen through most of 2024 and 2025.

The opportunity stands comes from Selby himself:

"You're going to see this nice self-reinforcing loop where governments are going to start providing chunky funding across other minerals. You're going to see more generalist investors come into the space, and it should hopefully be a self-reinforcing loop as we move through 2026."

The deeper investment theme, however, is the government response. For years, Western governments talked about reducing dependency on Chinese-controlled mineral supply chains. That conversation is now translating into active capital allocation in the United States through defence-industrial funding mechanisms, in Canada through federal and provincial critical mineral budgets, and across allied nations through bilateral mineral security frameworks. Nickel, as an essential input in stainless steel, electric vehicle batteries, and military-grade alloys, sits at the intersection of industrial and national security demand.

The rare earth sector provided a preview of what this dynamic looks like when it reaches inflection: a rapid repricing of assets as government backing validated the macro thesis for generalist institutional investors. Nickel has not yet experienced that repricing, but the structural conditions that preceded the rare earth move are increasingly present: tightening supply, rising costs, government engagement, and growing institutional attention. The setup is building. The question for investors is whether they position before or after the catalyst arrives.