It has reversed. In April the International Nickel Study Group expected a 2026 deficit of 32,000 t. After its meeting in Lisbon it now forecasts a surplus of 19,000 t for 2026 and 70,000 t for 2027: demand for primary nickel rises 7.6 percent to around 3.85 million t in 2026, production reaches 3.87 million t and grows to 4.07 million t in 2027 (INSG via Reuters, 13 October). For contract design this means: a surcharge justified by tight supply is not backed by the data. At the same time the year low of 14,885.00 USD/t from 15 October is no safe floor, because coordinated cuts in Indonesia or a moratorium on new plants can shift the balance quickly. Contracts should name Indonesian output cuts, political intervention in Jakarta and the direction of LME stocks as explicit adjustment triggers.

Wherever suppliers want to pass on a rising nickel price directly and in full even though European stainless demand remains subdued and the LME is falling. Outokumpu earned an adjusted EUR 17 million in its European business in the second quarter of 2026 and expects volumes up to 10 percent lower in the third quarter on rising costs and Middle East uncertainty (2 September); it names scrap, freight and fuel as the real cost drivers alongside the metal. Separating surcharge, base material, processing and energy components shows which part of a demand hangs on the LME and which does not, and creates negotiating leverage exactly there.

More than the balance suggests, and it comes from three directions. First, the authorities: on 5 November Indonesia's forestry task force announced action against companies linked to former Glencore trader Arif Kurniawan, who reportedly controlled a large share of the ore trade (Reuters). Nickel then rose 5.9 percent in two trading days. Second, the quotas: Macquarie expects Indonesia's exports of nickel and nickel products to fall by around 6 percent in 2026, and the market is waiting for the 2027 ore quotas (Reuters, 5 November). Third, the producers: coordinated cuts by Chinese producers in Indonesia were under discussion in October (Bloomberg, 21 October), but nothing has been decided. The INSG forecast with surpluses of 19,000 t for 2026 and 70,000 t for 2027 works against this (Reuters, 13 October). As long as quotas and cuts are not quantified, Indonesia remains an event risk with jumps on single days.

When the actual nickel content, the contractual surcharge mechanism and the market environment fit together. The mills' November surcharge is based on the October LME cash average, which at 15,470.00 USD/t was 5.1 percent below September. A rising November surcharge cannot be justified on that basis. There is less room for December: after Indonesia's action against a major ore trader, cash rose to 16,095.00 USD/t by 6 November, and the November average after five trading days is 1.0 percent above October. The surcharge becomes robust when you can check it against the mill's published value. Make the monthly surcharge mechanism, with publication date and calculation basis, part of the contract and ask for material, processing and energy to be shown separately.