If you’ve been checking the LME tickers lately, you know the vibe around nickel has shifted. Fast. Just a few months ago, everyone was talking about a "forever surplus." Now? Not so much. As of mid-January 2026, the price of nickel per pound is hovering around $8.00 to $8.15, depending on which minute you catch the London Metal Exchange (LME) spot price.
To put that in perspective for the folks who track metric tons: we’re looking at roughly $17,825 per tonne.
But the "sticker price" is only half the story. Honestly, if you're just looking at the raw number, you're missing the massive tug-of-war happening between Jakarta, Beijing, and the EV battery plants in North America. The market is basically a powder keg right now, and Indonesia just lit a match.
Why the price of nickel per pound is suddenly spiking
For most of 2025, nickel was the unloved child of the base metals world. Prices were stuck in the mud, barely scraping $6.80 per pound. Indonesia, which controls roughly 60% of the world’s supply, was pumping out ore like there was no tomorrow.
Then came the "January Jolt."
Just a few days ago, news broke that Indonesia’s Ministry of Energy and Mineral Resources is capping 2026 mining quotas (locally called RKAB) at around 250–260 million metric tons. That is a massive drop from the 379 million ton target they had last year. When the world’s biggest supplier says they’re cutting the tap by 30%, the market panics.
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We saw prices jump nearly 7% in a single night session on January 14th.
The "Saudi Arabia of Nickel" strategy
Indonesia isn't doing this by accident. They’ve realized they have the same leverage over nickel that Saudi Arabia has over oil. By tightening the supply, they’re trying to force the price of nickel per pound toward a level that makes their massive investments in "High-Pressure Acid Leach" (HPAL) plants actually profitable.
There's a real fear in the market that if these quotas aren't approved quickly, major miners like Vale might have to throttle back operations at places like Pomalaa. We're already seeing reports of temporary halts. It’s a high-stakes game of chicken.
What's actually driving your costs?
If you're buying nickel for industrial use—maybe you're in stainless steel or aerospace—you aren't just paying the LME spot price. You're paying the "all-in" cost, which includes premiums for purity and immediate delivery.
- The Stainless Steel Factor: About two-thirds of all nickel still goes into stainless steel. While the EV hype gets the headlines, the construction slump in China has actually been the biggest anchor on prices. If Chinese stimulus finally kicks in this year, that $8.00 floor might become a distant memory.
- The Battery Chemistry Pivot: This is where it gets nerdy. For a while, the "LFP" (Lithium Iron Phosphate) batteries—which use zero nickel—were winning. But as 2026 kicks off, we’re seeing a resurgence in high-nickel chemistries because drivers want more range. You can't get 500 miles on a charge without a lot of nickel.
- The Scrap Gap: Don't ignore the scrap market. Because primary nickel prices were low for so long, the collection of stainless scrap slowed down. Now that prices are rising, there's a scramble for secondary material, which is putting even more pressure on the price of nickel per pound.
The 2026 Outlook: Bull vs. Bear
Every analyst has a "hot take" right now. Some, like the team at Sumitomo Metal, still think we’re in a structural surplus because there's so much "shadow inventory" sitting in warehouses in Kaohsiung and Singapore. They argue that as soon as the price hits $9.00, everyone will dump their hoard and crash the market again.
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On the flip side, technical analysts at firms like ACY Securities are looking at the charts and seeing a "bullish continuation." They’re eyeing **$18,800 to $19,500 per tonne** ($8.50 to $8.85 per pound) as the next logical stop.
The reality? It depends entirely on whether Indonesia blinks. If the government realizes the supply squeeze is hurting their own smelters' margins, they might ease up on the quotas. But if they stick to their guns to "decarbonize" and "control the market," we could be looking at $20,000 per tonne before the cherry blossoms bloom in Tokyo.
Practical steps for buyers and investors
If you’re trying to navigate this volatility, "wait and see" is probably a bad strategy. Here’s what the pros are doing right now:
Lock in your physical supply early. With the Indonesian quota uncertainty, "just-in-time" delivery is becoming "just-too-late." If you have a production run coming up in Q2, securing physical metal now—even at a premium—is cheaper than a factory shutdown.
Watch the LME warehouse stocks. Inventory levels rose by nearly 90,000 tons last year. If you see those numbers start to drop sharply in the weekly reports, it’s a signal that the surplus is being eaten faster than expected.
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Diversify your sourcing. Projects like Canada Nickel’s Crawford site in Ontario are being fast-tracked for a reason. They won't produce metal until 2028, but the shift toward "IRA-compliant" (Inflation Reduction Act) nickel means Western-sourced metal will eventually command a different price than the stuff coming out of the Sulawesi rainforests.
Monitor the USD Index. Nickel is priced in dollars. If the Fed holds rates higher for longer in 2026, a strong dollar will act as a ceiling on how high the price of nickel per pound can go. A 1% rise in the dollar usually shaves about 0.5% off base metal prices.
The bottom line? The era of cheap, bottom-of-the-barrel nickel is likely over for this cycle. We've moved from a period of "too much" to a period of "too controlled."
Your next move: Review your supply contracts for 2026. If your pricing is tied to a lagging average, you might be shielded for now, but the "reset" coming in the next quarter is going to be a wake-up call for anyone who hasn't hedged their exposure. Keep a close eye on the LME closing prices every Friday afternoon; that's where the real sentiment for the following week is established.