Japan's leading nickel smelter Sumitomo Metal Mining has projected that the global nickel market will remain in surplus throughout 2027, according to a report published on October 6, 2026. The company forecasts a global nickel surplus of 34,000 metric tons in 2027, representing a narrowing from the 38,000 metric tons surplus expected in 2026. The tightening of the market surplus reflects anticipated changes in production dynamics, particularly from the world's largest nickel-producing region.
Indonesian production of low-grade nickel pig iron (NPI) is projected to rebound significantly by 11.9%, reaching 1.88 million tons in 2027, according to Sumitomo Metal Mining's half-year market outlook. This recovery is expected to be supported by potentially higher government-approved mining quotas and a favorable pricing environment for production inputs, including lower sulphur and sulphuric acid costs. The outlook comes after a challenging 2026 for Indonesian nickel producers.
Indonesian NPI production is forecast to decline 2.3% in 2026 following a robust 12.4% increase in 2025. This year-on-year contraction in 2026 was triggered by government-implemented cuts to mining quotas. Indonesia maintains a dominant position in global nickel supply, accounting for more than 60% of worldwide nickel output.
Sumitomo Metal Mining's analysis suggests that supply-side dynamics, rather than demand concerns, will remain the primary factor shaping nickel market conditions in 2027. The expected recovery in Indonesian production, combined with input cost advantages, positions the market for continued oversupply conditions despite the predicted narrowing of the surplus.
Source: mining.com