ASX materials stocks have been a shining light in what has otherwise been a turbulent 2026 for the ASX.
The S&P/ASX 200 Materials Index (ASX: XMJ) is up 9% year to date.
This has significantly outpaced the S&P/ASX 200 Index (ASX: XJO), which is almost even with where it began the year.
ASX materials stocks have outperformed in 2026 largely due to momentum from a strong 2025, elevated and sometimes rising commodity prices (especially metals tied to electrification), and investor rotation into inflation-resistant "real asset" sectors.
One such ASX materials stock that has enjoyed this sector outperformance is Nickel Industries Ltd (ASX: NIC).
This ASX materials stock is a producer of nickel pig iron , a key ingredient in stainless steel. It is also engaged in exploring, mining, acquiring, and developing nickel projects globally.
Its share price is up 18% year to date and almost 80% over the last 12 months.
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More upside to come for this ASX materials stock
For those worried they missed the boat on this ASX materials stock, the team at Bell Potter are predicting more upside.
In a recent report, the broker provided updated guidance following the company's quarterly activities report.
The broker said NIC's March 2026 quarter was broadly in line with expectations.
It produced about 30,300 tonnes of nickel in NPI, slightly below forecasts, with attributable production also a bit under expectations.
Costs were close to forecasts at around US$10,450 per tonne, but rose 4% from the previous quarter due to lower ore grades and higher electricity prices.
Additionally, the Hengjaya mine recovered strongly after earlier delays, selling about 3.0 million tonnes of ore, slightly above expectations.
Overall, NIC reported strong earnings, with EBITDA of about US$136 million – well above forecasts and up sharply from the previous quarter.
Our key takeaway is the nickel price leverage demonstrated with this result. RKEF operations stood out, where EBITDA was up 145% from US$35m to US$86m, driven almost entirely by NPI pricing (up 19%) rather than volume (down 4%).
Buy recommendation unchanged
Based on this guidance, Bell Potter has retained its buy recommendation on this ASX materials stock.
The broker has also reaffirmed its price target of $1.450.
From last week's closing price, this indicates an upside potential of 40%.
NIC offers nickel price leverage and diversified margin exposure across an integrated value chain. Retain Buy, our $1.45/sh Target Price is unchanged.
