Nickel has been the ASX’s most unloved metal for two years, but 2026 has delivered a genuine turnaround. Indonesia’s decision to sharply cut its mining quotas has pushed prices to two-year highs, tightening a market drowning in cheap ore. For Australian nickel investors who sat through mine suspensions, smelter closures and write-downs, the question is whether the rally has staying power, and whether it comes soon enough to justify restarting operations mothballed since 2024.
Price action: nickel claws back to two-year highs
Three-month nickel on the London Metal Exchange spent 2025 grinding along multi-year lows before recovering through the first half of 2026, climbing from around US$15,000 a tonne to a March quarter peak near US$18,785, then above US$19,000 in the June quarter, a two-year high. Prices have since traded in a wide band through August, swinging between the high-US$16,000s and high-US$18,000s as the market digests how far Indonesian supply discipline will go. The Resources and Energy Quarterly attributes the recovery to recent supply shocks and forecasts prices above US$17,000 a tonne in real terms as the market shifts toward deficit.
Nickel Industries doubles down on downstream processing
Nickel Industries (ASX:NIC) has used the stronger prices to push into high-pressure acid leach processing rather than just riding the ore price. It recently monetised a slice of its Sampala resource for a 36 per cent stake in the CNE HPAL project, and committed roughly US$169 million for 17.5 per cent of the TMI HPAL project, making Sampala exclusive ore supplier to both. The company’s ASX filings show a half-year results webcast on 26 August, which should show how much of the recovery has reached earnings.
BHP, IGO and Glencore weigh their next move
The bigger diversified miners remain far more cautious. BHP’s Western Australia Nickel operations, including Nickel West, have been suspended since October 2024, with a decision on the Kalgoorlie Nickel Smelter’s future looming and the broader restart review not due until February 2027. IGO’s Nova mine will close by year end and become a lithium processing facility instead, a sign quality WA assets are being redirected, not restarted. Glencore wrote Murrin Murrin down to zero in early August. Wyloo Metals is the exception, still running its Kambalda mines and planning a battery materials facility at Kwinana.
Indonesia’s quota cut is rewriting the supply story
The catalyst behind this year’s recovery is squarely in Jakarta. Indonesia’s energy ministry set its 2026 nickel ore mining quota (RKAB) at roughly 260 to 270 million wet metric tonnes, down from 379 million approved for 2025, a cut of close to a third. As we covered when the quota decision first landed, Jakarta has framed the move as market stabilisation, pointing to a US$18,000 to US$20,000 a tonne band as its preferred range. Indonesia still supplies more than half the world’s mined nickel, so tightening there moves prices, even though it does little for the cost disadvantage facing Australian producers.
Could nickel join the critical minerals reserve?
Canberra’s new $1.2 billion Critical Minerals Strategic Reserve, live from the second half of 2026, initially targets antimony, gallium and rare earths, not nickel. But nickel’s status as a critical mineral, given its role in battery cathodes, keeps it in the conversation. We’ve outlined how the reserve is taking shape, and the official announcement leaves room to expand the list. For now, nickel producers face Indonesian competition alone.
What it means for ASX nickel exposure
The split between Nickel Industries and the WA sulphide miners is really processing exposure versus mining exposure. Nickel Industries’ Indonesian assets sit near the bottom of the cost curve, so it gains from higher prices without the legacy cost base sidelining BHP, IGO and Glencore. That dynamic echoes other battery metals, where supply discipline rather than genuine demand has done the heavy lifting, and base metals more broadly, where fortunes are diverging sharply by commodity. Investors need to separate who benefits from a higher price from who can restart production profitably.
What to watch next
- Nickel Industries’ half-year results and webcast on 26 August, the first detailed read since the HPAL deals.
- BHP’s decision on the Kalgoorlie Nickel Smelter, expected within months, ahead of the Nickel West restart review due by February 2027.
- Whether Indonesia holds firm on its 2026 RKAB quota or grants further smelter exceptions.
- LME nickel price action around the US$17,000 to US$20,000 a tonne band Indonesian officials flagged as sustainable.
Frequently Asked Questions
Why has the nickel price risen in 2026?
Indonesia cut its 2026 nickel ore mining quota by roughly a third versus 2025, tightening supply from the country that produces more than half the world’s mined nickel. That supply discipline, rather than a jump in demand, has pushed LME prices to two-year highs at points through the first half of the year.
Are Australia’s shuttered nickel mines likely to restart soon?
Not imminently. BHP’s Western Australia Nickel operations remain suspended with a restart decision not due until February 2027, and IGO is repurposing its Nova mine rather than resuming production there. Higher prices help the economics, but Australian operations still carry a higher cost base than Indonesian supply, so a broad restart would need prices to hold well above current levels for longer.
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