You’ve probably seen the headlines. One day nickel is the "green gold" of the electric vehicle revolution, and the next, it’s a commodity in a tailspin because of a massive supply glut in Indonesia. If you are trying to pin down the cost of nickel per pound right now, you aren't just looking at a number on a ticker. You are looking at a tug-of-war between high-tech battery demand and old-school stainless steel production.
Right now, as of mid-January 2026, the market is in a weird spot. It's volatile. Honestly, "volatile" might be an understatement. We just saw prices bounce off a 19-month high of roughly **$8.48 per pound** ($18,700 per metric ton) on January 14, only to settle back down toward the $8.12 range a few days later.
Why the sudden roller coaster? It basically comes down to a game of chicken between the Indonesian government and global markets.
The Real Drivers Behind the Cost of Nickel Per Pound
Most people think the price of nickel moves because Tesla sells more cars or China builds more skyscrapers. While that’s partly true, the real puppet master is Indonesia. They control over half of the world's supply. When they sneeze, the rest of the world gets a cold.
The Indonesia Quota Drama
Recently, Jakarta signaled they might slash nickel output by as much as 34% in 2026. They're worried about oversupply—which has been depressing prices for years—and the fact that their ore grades are actually starting to deteriorate.
But here’s the kicker: they haven't released the final "RKAB" (production quotas) for many miners yet. This creates a massive vacuum of information. When Vale—a huge player in the space—announced they had to halt some operations because they didn't have their 2026 permits yet, the market panicked.
Prices spiked. Then, when the government stayed quiet about the details, traders started second-guessing the "squeeze" and prices dipped. It's a mess.
The Two-Tier Market
You can't talk about the cost of nickel per pound without understanding that not all nickel is created equal.
- Class 1 Nickel: This is the high-purity stuff (99.8% or higher). This is what goes into those EV batteries. It’s what trades on the London Metal Exchange (LME).
- Class 2 Nickel: This is Nickel Pig Iron (NPI) and ferronickel. It’s "dirtier" and used almost exclusively for stainless steel.
For a long time, these two markets were separate. But then Chinese companies figured out how to turn cheap Class 2 nickel into high-grade battery material (matte). This "bridging" of the two markets is exactly why the price collapsed in 2024 and 2025. There was suddenly too much of it.
Current Market Rates (January 2026)
If you're looking for the hard numbers today, Friday, January 16, 2026, here is where the dust has settled for the moment:
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- LME Cash Settlement: Approximately **$8.12 per pound** ($17,905 per metric ton).
- 3-Month Futures: Trading slightly higher at $8.20 per pound, suggesting the market expects things to stay tight in the short term.
- Recent Peak: We hit $8.56 per pound on January 6th before the latest correction.
- The Floor: Analysts at the World Bank and various trading houses think the average for 2026 will hover around $6.90 to $7.15 per pound, though current supply disruptions are pushing us well above that for now.
It’s a massive swing from the $13+ prices we saw during the 2022 short squeeze. We aren't there anymore. But we aren't at the $6 "survival mode" lows of late 2025 either.
Why You Should Care About the "Shadow Stocks"
Here is something the average investor misses: the LME inventories aren't the whole story.
There are "off-warrant" or shadow stocks sitting in warehouses in Singapore and Kaohsiung. These stocks surged by over 50% last year. When these stocks are high, it acts like a ceiling on the price. Even if Indonesia cuts production, there’s a lot of metal sitting in the dark, waiting to be dumped onto the market if the price gets high enough.
The Stainless Steel vs. EV Battery Tug-of-War
About 65% of all nickel still goes into stainless steel. That’s the "boring" side of the business, but it’s the bedrock of demand. If the global economy slows down—especially construction in China—nickel prices usually tank, regardless of how many EVs are being built.
Right now, Chinese stainless steel mills are actually ramping up a bit. This is providing a "floor" for the cost of nickel per pound. They’re buying because they’re worried about those Indonesian quotas. If they can’t get the ore, they can’t make the steel.
On the EV side, the growth is still there, but it’s shifted. Manufacturers are looking at LFP (Lithium Iron Phosphate) batteries which don't use nickel at all. This has taken some of the "hype" out of the nickel market. However, for long-range, high-performance cars, High-Nickel NCM (Nickel Cobalt Manganese) batteries are still king.
Actionable Insights for 2026
If you're a buyer, a scrapper, or an investor, you've got to play this smart. Don't get caught up in the daily "noise" of the LME.
Watch the Quotas: The single most important date for the cost of nickel per pound this quarter will be the official release of the Indonesian RKAB approvals. If the government actually sticks to their 250-million-ton limit, prices will likely stay above $8.00. If they cave and grant more, expect a slide back toward $7.00.
Check the Spread: Look at the difference between the "Cash" price and the "3-month" price. Currently, we are in "contango" (future price is higher). This usually means there's enough physical metal for now, but people are worried about the future.
Mind the Dollar: Nickel is priced in USD. In early 2025, a super-strong dollar made nickel expensive for everyone else, killing demand. If the Fed starts cutting rates aggressively in 2026, the dollar could weaken, making nickel cheaper for Chinese and European buyers, which usually sends the price up.
Keep an eye on the "green" premium too. There’s a growing movement to price "clean" nickel (mined with lower carbon footprints in places like Canada or Australia) higher than the "dirty" nickel from Indonesia. We aren't there yet, but the gap is widening.
The bottom line? The cost of nickel per pound isn't just a number; it’s a reflection of a massive geopolitical shift. Indonesia wants to control the price like OPEC controls oil. Whether they can actually pull it off without crashing their own economy is the multi-billion dollar question.