Divergent Paths for Norilsk Nickel’s Core Commodities

Shares in the Russian mining giant Norilsk Nickel demonstrated resilience in Friday's trading session. Finding support near 145 rubles, the equity held its ground despite a significant upward revision to forecasts for a global nickel surplus. The company's stock received additional backing from monetary policy, as Russia's central bank continued its easing cycle.

Providing a fundamental tailwind for the Moscow Exchange, the Russian Central Bank cut its key interest rate to 16%. This move, sustaining a more accommodative policy stance, boosted overall market liquidity. This environment is helping Norilsk Nickel withstand pressure stemming from declining expectations for nickel prices.

A Stark Revision in Nickel Forecasts

In its latest market assessment, Norilsk Nickel has substantially increased its projections for worldwide nickel oversupply. The company now anticipates a surplus of 240,000 tonnes for 2025—a figure that doubles its mid-year estimates. Looking ahead to 2026, the glut is expected to widen further to 275,000 tonnes. Nornickel identifies relentless capacity expansion in Indonesia as the primary driver, causing supply to outpace demand growth.

Should investors sell immediately? Or is it worth buying Norilsk Nickel?

Palladium Offers a Counterbalance

The bleak nickel outlook is partially offset by a more stable situation in the platinum group metals (PGMs) segment. For palladium in the current year, Norilsk Nickel projects a balanced market. However, when investment demand is factored into the equation, a structural deficit of 200,000 ounces emerges. This underlying scarcity is providing a supportive element for market sentiment.

The 2026 Landscape

The prospects for the company's two main business divisions remain distinctly separated. The massive nickel surplus is likely to maintain downward pressure on prices within the base metals segment. In contrast, the anticipated palladium shortfall—projected at 100,000 ounces for 2026 excluding investment demand—presents a potential counterweight.

Investor attention is now turning to upcoming quarterly production figures. A potential slowdown in the growth of Indonesian supply would be necessary to reverse the declining trend in nickel. Until such a shift materializes, the 16% interest rate level serves as a crucial fundamental support for the equity's valuation.