Nickel prices have retreated to the $16,000-$17,000 per tonne range on the London Metal Exchange, hitting the bottom of a six-month trading band, according to commentary from Mark Selby, Chairman and CEO of Canada Nickel Company. However, Selby argues the pullback reflects speculative positioning around Indonesian export quota uncertainty rather than deteriorating market fundamentals. Indonesian ore production is running significantly below prior-year levels, with the government yet to confirm whether it will approve the full 280-290 million tonne quota requested for the year or a potential 10% top-up.
A revised pricing formula for limonite ore feeding high-pressure acid leach (HPAL) plants briefly unsettled sentiment, as elevated sulphur costs made it impossible for some HPAL producers to meet the new benchmark pricing. Seasonal factors also weigh on supply, as Philippine ore output peaks from April through September before dropping to a quarter or third of those levels from October through March. The underlying demand picture presents a sharply different narrative.
Stainless steel demand, accounting for roughly two-thirds of total nickel consumption, has grown 5% year to date. More significantly, battery and precursor supply chain demand is up 35% year-over-year, substantially exceeding the 5% end-market EV sales growth typically cited by analysts. This represents a stark divergence from analyst forecasts at the start of the year that called for nickel demand growth of only 2-3%, paired with projections of 6-7% supply growth that would require Indonesian quota expansion beyond the country's stated interests.
Selby's analysis also highlights cobalt dynamics affecting HPAL economics. Cobalt prices spiked to approximately $25 per pound in mid-2026 following a Congolese export ban but have since eased to roughly $18 as stockpiled material reaches the market. Selby expects further softening toward $15, an important byproduct credit for HPAL producers already squeezed by elevated sulphur costs.
Global supply is estimated down 3-4% against the demand surge, creating the foundation for Selby's forecast of a 20-30% nickel price recovery by year-end, potentially moving prices from the current $16,000-$17,000 range toward $19,000-$20,000 or higher. Across the project landscape, several corporate milestones underscore activity in the sector. Talon Metals released what Selby characterizes as one of the best drill holes he has observed in the nickel space at its Tamarack project in Minnesota, operated as a joint venture with Rio Tinto.
However, Selby cautions that the intercept sits 750-800 metres deep with resource size around it not yet established, and notes Talon's implied $1.5 billion valuation appears steep relative to comparable high-grade nickel developments such as Voisey's Bay and Glencore's Raglan, both costing approximately $2.5 billion and requiring roughly six years to reach production. Homeland Nickel, led by CEO Steve Balch, has consolidated a portfolio of nickel laterite properties in Oregon following an introduction facilitated by Selby to a former RNC Minerals shareholder base. Homeland's roughly $100 million valuation is positioned against comparable names including Ardea Resources, advancing a feasibility study with Japanese partners near Kalgoorlie, and Horizonte Minerals, whose Araguaia project declined to zero despite carrying a higher-grade resource than Homeland's portfolio.
Magna Mining, under CEO Jason Jessup, continues drilling in the Sudbury basin following a capital raise from Alpayana, a South American private investor providing significant funding for further exploration and development. On the sulphide front, Centaurus Metals has flagged plans to reach financing and a final investment decision by the third quarter on its Brazilian nickel project. Visionary Metals has commenced early-stage drilling on an underexplored rock package in Wyoming estimated at 2.7-3 billion years old that has received minimal prior exploration activity.
Canada Nickel itself advanced a series of project milestones between July and September 2026. The company secured its main federal permit in late July, announced a ninth Timmins Nickel District resource, released upgraded infill drill results at Reed, selected Komatsu for a roughly $1.5 billion mining fleet contract, and closed a $21 million financing in late August. Selby noted vendor enthusiasm around the Komatsu deal has remained strong despite Crawford generating no cash flow to date, reflecting confidence in the project team and jurisdiction.
The company also signed an offtake agreement with RWE Supply and Trading over the summer, positioned to serve European demand for low-carbon nickel. Canadian policy support has included a new immediate capital-cost write-off valued at an estimated $80 million to the Crawford project and a "one project, one process" permitting initiative announced at Canada's Investment Summit. Selby's core thesis centers on the divergence between current positioning and underlying supply-demand realities.
The 35% year-over-year battery-sector demand growth, combined with the 5% stainless steel uptick and constrained supply near the lower end of Indonesia's quota range, suggests fundamentals support significantly higher prices than current market levels. The commentary reflects the perspective of a company executive with direct financial interests in nickel prices and several discussed companies, and investors should weigh it alongside independent market data and company disclosures. Source: Crux Investor interview with Mark Selby, Chairman and CEO of Canada Nickel Company
Source: cruxinvestor.com