Russia's Nornickel, the world's largest palladium producer, said a nine-month overhaul of a key smelting unit next year may reduce its output of key metals in 2027 and possibly 2028. It kept its production forecasts for 2026.
At a glance
- The overhaul covers a flash-smelting unit in the nickel production chain at the Nadezhda plant.
- Third-quarter nickel output rose 41% from the previous quarter to 61,000 tonnes.
- Nornickel expects copper and palladium output to reach the top of its 2026 forecast ranges.
Background
Nornickel is a Russian miner that is the world's largest producer of palladium and a major producer of refined nickel; it also produces copper. Palladium is used mainly in car exhaust catalysts, and nickel goes into stainless steel and batteries. A flash-smelting furnace is a key step that turns concentrate into a richer intermediate before refining.
What happened
Nornickel said on October 26 that it will start a nine-month overhaul next year of a key flash-smelting unit in its nickel production chain at the Nadezhda plant, Reuters reported. It expects the work to affect output of its key metals in 2027 and possibly 2028, but has not said by how much.
The company kept its 2026 forecasts: 193,000 to 203,000 tonnes of nickel, 2.415 million to 2.465 million ounces of palladium, and 336,000 to 356,000 tonnes of copper excluding the Bystrinsky complex.
How the third quarter went
Nickel output rose 41% from the previous quarter to 61,000 tonnes, bringing the nine-month total to 146,131 tonnes, up 4% from a year earlier. Palladium output rose 25% from the previous quarter to 736,000 ounces, though nine-month output was 4% lower at 1.934 million ounces.
Copper production, including Bystrinsky, rose 4% to 127,000 tonnes. "We expect copper and palladium output to be at the upper end of the annual forecast range," the company said.
What it means
A planned cut at the biggest palladium supplier could tighten the market in 2027, but Nornickel has not given numbers, so the size of any shortfall is still unknown. For now, its 2026 output is on track, with palladium and copper heading for the top of their ranges.
Our read
Outlook: bullish. A planned overhaul at a top nickel and palladium producer may reduce supply in 2027, though the size of the cut is not yet known.
What to watch
- Nornickel's 2027 production guidance, which should show how much the overhaul will cut.
- When the Nadezhda furnace overhaul starts next year.
- Fourth-quarter output against the 2026 forecasts.
For information only, not investment advice.
Nickel price in India
metalscost.com India reference price as of 2026-11-01.
Detailed analysis
Timeline
- 2026-10-26: Nornickel reports third-quarter output and announces a furnace overhaul for next year.
Supply Drivers
A nine-month furnace overhaul at Nadezhda may reduce Nornickel's metal output in 2027 and possibly 2028.
Mining Production
Third-quarter nickel output rose 41% and palladium 25% from the previous quarter.
What could lift prices
- The world's largest palladium producer expects lower output in 2027.
- The overhaul hits the nickel production chain at a major refined nickel producer.
What could weigh on prices
- Nornickel's 2026 output is on track, with palladium and copper near the top of guidance.
- The size of the 2027 cut is not yet known and may be small.
Country impact
| Country | Impact | Reason |
|---|---|---|
| Russia | Medium | Its biggest metals producer plans a major furnace overhaul next year. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Automotive | Negative | Carmakers rely on palladium for exhaust catalysts, and supply could dip in 2027. |
| Stainless Steel | Neutral | Any nickel shortfall from Nornickel would come after 2026, and its size is unknown. |
Who gains, who loses
- Other palladium producers: Lower Nornickel output in 2027 could support prices for their metal.
- Palladium buyers such as carmakers: Supply from the largest producer may fall in 2027.
Other ways this could play out
- If Nornickel's 2027 guidance shows a large cut, palladium and nickel prices could rise.
- If the overhaul finishes quickly, any shortfall could be limited to 2027.
Price risks
- Indonesian nickel supply matters far more for nickel prices than one Russian plant.
- Weak car sales could offset lower palladium supply.
Technical view
Price is trading below both its 20-period and 50-period moving averages, a bearish alignment.
Computed from metalscost.com's own stored price history.
