Nickel Hits 19-month High

Nickel futures are trading around $17,200, falling from March highs near $17,770, reflecting ongoing structural tightness in the market and cautious investor sentiment. Supply remains constrained as Indonesia advances its proposed export tax on nickel, while disruptions to shipping through the Strait of Hormuz add logistical pressure on key raw materials. On the corporate front, Vale Base Metals reported a 13% increase in its nickel reserves and resources in 2025, supporting medium-term supply potential, while regional collaboration through the IndoPhil Nickel Corridor aims to strengthen integrated, resilient supply chains. Demand fundamentals remain robust, driven by growth in electric vehicle batteries, renewable energy storage, and industrial applications. China continues to account for a significant share of exports, while diversification efforts across Asia underscore the strategic importance of nickel in global critical mineral markets.

Nickel futures rose to around $17,300 per tonne, rebounding from a recent over one-month low, amid renewed hopes for a temporary de-escalation in the Middle East conflict. The US proposed a one-month ceasefire to Iran, boosting risk sentiment and triggering short-term gains in industrial metals markets. On the supply front, Nickel Industries received approval for 14.3 million wet metric tonnes of 2026 nickel ore sales in Indonesia, providing clarity for both domestic and export supply, underpinning futures prices. Meanwhile, the market remains cautious over potential windfall taxes on nickel in Indonesia, which could affect output and costs. Chinese liquidity support helped bolster sentiment, as the People’s Bank of China conducted a 500 billion yuan medium-term lending facility operation. Overall, nickel remains in a sensitive range, with prices fluctuating amid supply reassurances and lingering geopolitical risks.

Nickel futures slid to around $17,000 per tonne in March, hitting its weakest level in over a month, amid rising global risk aversion as Middle East tensions lifted oil prices and reinforced inflation concerns. The shift has supported a stronger US dollar and tempered expectations for near-term Federal Reserve rate cuts, adding broad downside pressure across industrial metals. At the same time, the conflict has exposed vulnerabilities in the nickel supply chain, particularly for battery-grade materials, as processing relies heavily on sulfur inputs linked to Middle Eastern trade routes. Prolonged disruptions could raise costs for high-pressure acid leach (HPAL) operations, increasing price volatility even without direct ore shortages. Meanwhile, in Indonesia, supply risks have also intensified after authorities halted operations at a nickel processing facility in Morowali following a fatal landslide, adding to ongoing regulatory scrutiny and production uncertainty.