Date: April 15, 2026

Category: Market Intelligence / Price Trends

Introduction

As the second quarter of 2026 unfolds, the global base metals landscape is being reshaped by a complex interplay of supply-side policies, geopolitical tensions, and evolving demand drivers. Nickel and copper—two metals critical to energy transition and industrial manufacturing—are moving in distinctly different directions.

Nickel is finding support from Indonesian supply restrictions, while copper remains caught between record-high inventories and unprecedented demand from AI infrastructure and electrification. This report examines the latest price dynamics, supply-demand fundamentals, and major bank forecasts to provide a clear market outlook for Q2 2026.

Part 1: Nickel — Policy-Driven Supply Tightening

Current Price Levels

LME three-month nickel closed at $17,200 per tonne in the week ending April 10, 2026, edging up marginally from $17,060 per tonne the previous week. LME inventories stood at 281,670 tonnes, reflecting a broadly balanced global market amid mixed supply-demand signals.

The Indonesia Factor: RKAB Quota Cuts

Indonesia—the world‘s largest nickel producer, accounting for approximately 50% of global mined output—has emerged as the dominant force shaping nickel prices. The Ministry of Energy and Mineral Resources (ESDM) has finalized its 2026 mining quota (RKAB) at 190–200 million tonnes, a significant reduction from the 379 million tonnes approved in 2025 and well below projected 2026 ore consumption of approximately 330 million tonnes.

The impact has been amplified by targeted production cuts at major mines. PT Weda Bay Nickel’s 2026 ore quota has been sharply reduced to 12 million tonnes from 42 million tonnes in 2025—a 71% cut aimed at lifting global nickel prices. Weda Bay is a key asset partly owned by Tsingshan Holding Group and Eramet.

Supply-Demand Balance: From Surplus to Tightness?

Market forecasts vary significantly:

• Goldman Sachs: Projects a 2026 average nickel price of approximately $14,800 per tonne, but warns that if Indonesia further tightens resource development policies and reduces quotas to 260 million tonnes, the global nickel supply growth will slow markedly, creating significant price support.
• CITIC Securities: Takes a more bullish stance. If Indonesia‘s 2026 mining quotas are fully implemented, the country’s nickel production would fall to 2.6–2.7 million tonnes, triggering a global supply deficit of 200,000 tonnes. In this scenario, LME nickel prices could rise to $22,000 per tonne.
• Morgan Stanley: Offers a more conservative outlook, forecasting nickel prices to potentially retreat to $15,500 per tonne in 2026 as demand growth roughly matches supply growth.
• ING & World Bank: Project average nickel prices of $15,250–$15,500 per tonne for 2026, emphasizing that without large-scale, coordinated supply reductions, the rally may be unsustainable.

Demand Side: Stainless Steel and Battery Headwinds

Despite supply-side support, demand fundamentals remain subdued. Recovery in China‘s stainless steel and EV battery segments has fallen short of expectations. The stainless steel sector, still the largest nickel consumer at approximately 65–70% of global demand, continues to transmit nickel price increases into finished steel products. Meanwhile, the battery sector—now consuming approximately 15–18% of global nickel output—faces competition from lithium-iron-phosphate (LFP) batteries, which contain no nickel or cobalt and continue gaining market share.

Nickel Outlook for Q2 2026

Nickel prices are expected to remain range-bound in the near term, with volatility linked to Indonesia’s final RKAB approvals and post-monsoon ore flows from the Philippines. A sustained supply deficit could lend upward support, but high refined inventories and weak stainless steel demand may cap sharp gains. The tightening ore supply is establishing a firm cost floor, particularly as saprolite availability for pyrometallurgical routes remains limited.

Part 2: Copper — The AI-Driven Tightrope Walk

Current Price Levels and Recent Movements

LME copper has experienced extraordinary volatility. The red metal surged to record highs above $13,000 per tonne in early January 2026, driven by a “perfect storm“ of structural supply deficits and insatiable AI-driven demand. However, prices have since moderated, currently trading around $12,500 per tonne as of early April.

Diverging Institutional Forecasts

The copper market is characterized by sharp disagreements among major financial institutions:

Goldman Sachs revised its copper outlook downward on April 6, 2026, cutting its 2026 LME copper average price forecast from $12,850/t to $12,650/t while maintaining its long-term bullish thesis. The bank lowered global refined copper demand growth from 2.0% to 1.6% and raised its global refined copper surplus estimate from 380,000 tonnes to 490,000 tonnes. Excess inventory is expected to concentrate outside the US, pushing those regional markets toward balance. Goldman notes that copper‘s strategic importance—tied to grid infrastructure and energy security—has reduced its cyclical sensitivity, with demand adjustments smaller than for aluminum.

J.P. Morgan remains firmly bullish, projecting a 2026 average price of $12,075 per tonne with prices rising to $12,500 per tonne in H1 2026 as severe supply disruptions tighten the refined copper market. The bank forecasts a 2026 supply deficit of 330,000 tonnes and expects prices to continue rising to $15,000 per tonne in 2027.

Citi maintains one of the most optimistic outlooks, forecasting Q2–Q4 2026 average prices of $13,000 per tonne with a potential spike toward $14,000 as early as May. The bank cites multiple bullish catalysts: low interest rates, US fiscal expansion, European defense spending, and energy transition demand.

The Inventory Paradox

Despite record prices, global visible copper inventories have more than doubled within a year, surging from approximately 470,000 tonnes in early 2025 to about 1 million tonnes as of February 2026—a five-year high. This inventory build occurred despite supply disruptions at global mines, highlighting weakening demand-side momentum.

The situation reflects a significant geographical imbalance: US inventories have been heavily stocked as traders hedge against potential import tariffs, with COMEX inventories quintupling over 2025. This has tightened non-US markets, with LME inventories remaining relatively low outside America.

AI Infrastructure: The New Demand Frontier

Perhaps the most transformative development in the copper market is the emergence of AI data centers as a major demand driver. A landmark S&P Global report warned that the “copper gap“—the difference between projected demand and available supply—could reach 10 million tonnes by 2040.

Key statistics:

• Data center installations in 2026 alone are expected to consume approximately 475,000 tonnes of copper, a 30% year-over-year increase.
• Hyperscale AI data centers require 4 to 6 tonnes of copper per megawatt for high-capacity power lines and cooling systems.
• Global data center copper demand is projected to reach 400,000 tonnes annually by 2030, with peak consumption of 572,000 tonnes in 2028—annual growth of 8–12%, far outpacing traditional demand sectors.

Supply-Side Constraints

Copper concentrate supply is expected to remain structurally tight in 2026, with smelter demand continuing to outpace mine supply. The International Copper Study Group (ICSG) projects refined copper production to rise only modestly by about 0.9% in 2026 after a stronger 3.4% increase in 2025. Meanwhile, global refined copper consumption is forecast to grow by approximately 2.1% year-over-year in 2026.

Key supply challenges include ongoing operational disruptions in Chile and Peru (ore grade decline, water shortages, community protests), a 17–23 year mine development cycle that prevents rapid supply adjustment, and announced production cuts by major Chinese smelters due to falling profitability.

Copper Outlook for Q2 2026

Copper prices are likely to remain in a consolidation range around $12,000–$12,700 per tonne in Q2 2026, awaiting clearer demand signals. J.P. Morgan expects prices to consolidate around $12,000 per tonne in the short term, with upside potential only emerging in the latter part of Q2 when post-holiday demand recovery signals in China become clearer. If economic stimulus policies accelerate or infrastructure investment rebounds, copper prices could regain upward momentum.

Part 3: Trade Policy Developments — The 232 Tariff Reset

On April 2, 2026, President Trump signed a proclamation fundamentally restructuring the Section 232 tariff framework for aluminum, steel, and copper. Effective April 6, the calculation method underwent a fundamental shift—from a flat 50% tariff based on metal content to a three-tiered, full-value tariff structure of 50%, 25%, and 15%.

Key Provisions:

• 50% tier: Applies to steel, aluminum, and most related derivatives
• 25% tier: Applies to select copper products and certain derivatives
• 15% tier: Benefits certain metal-intensive industrial equipment and grid components through 2027

The change expands the tax base from ”metal component value“ to ”full customs value of finished products.“ This means that previously lower-rate products now face significantly higher effective duties.

Practical Implications for Metal Traders

While direct US steel imports from China have declined significantly—from 989,900 tonnes in 2022 to 756,200 tonnes in 2025, representing just 0.6% of total exports—the structural impact is more significant. Products with metal content accounting for 20% of product value faced an effective 10% duty under the old system but now face 25% under the new framework, affecting mechanical components, fasteners, and construction parts.

For international metal buyers and distributors, this policy shift creates:

• Increased compliance complexity when exporting metal derivatives to the US
• Potential rerouting of trade flows as buyers seek alternative sources
• A continued premium for US domestic metal inventories

Conclusion: Key Takeaways for Buyers and Traders

Nickel

Indonesian policy tightening is the dominant price driver. While supply constraints provide a firm cost floor, weak stainless steel and battery demand will likely cap significant upside. Watch for final RKAB approvals and Philippine monsoon recovery.

Copper

The copper market presents a classic ”good news, bad news“ story. Long-term demand from AI infrastructure, grid modernization, and electrification remains exceptionally strong. However, high global inventories and cautious short-term demand are creating consolidation pressure. The geographical disconnect between US and non-US markets requires careful sourcing strategy.

Strategic Implications

• For metal buyers: Q2 2026 presents opportunities to secure copper at more stable levels before potential H2 tightness. Nickel buyers should monitor Indonesian policy announcements closely.
• For metal distributors: The 232 tariff reset adds complexity to US-bound shipments. Consider alternative markets or value-added processing to mitigate tariff exposure.
• Long-term view: Both metals face structural supply constraints that will likely push prices higher over the multi-year horizon, driven by energy transition, AI infrastructure, and strategic stockpiling policies.

Nazo Metals provides professional distribution and processing services for stainless steel, copper, brass, and aluminum. For market intelligence or to request a quote, please visit www.nazometals.com.