Nickel Futures Extend Gains on Indonesia Quotas

Nickel traded around $17,000 per tonne, holding near one-month highs amid uncertainty over Indonesia’s production policies. Indonesia’s ongoing review of nickel production quotas remained a key focus, with the government limiting additional approvals to smelters facing raw material shortages, reinforcing expectations of tighter ore availability as policymakers seek to prevent oversupply and stabilize the market. At the same time, renewed Middle East tensions lifted oil prices and raised concerns over sulfur supplies, a key input for Indonesia’s nickel processing industry, increasing production cost pressures and adding to upward momentum in prices. Meanwhile, gains remained limited by weak downstream demand, with subdued activity in China’s stainless steel sector and cautious nickel sulfate purchases amid slower growth in nickel-based battery demand weighing on consumption prospects.

Nickel traded around $17,000 per tonne, rebounding from six-month low levels near $16,300 and approaching a one-month high, supported by easing supply concerns. Indonesia reaffirmed that it would not approve a broad expansion of nickel production quotas, with additional approvals limited to smelters facing raw material shortages. The policy reinforced expectations of relatively tight ore availability, as the government seeks to prevent oversupply and stabilize the global nickel market while allowing only targeted production increases. At the same time, renewed Middle East tensions kept oil prices elevated and sustained concerns over sulfur supply, a key input for Indonesia's nickel processing industry, providing additional support to the market. However, gains were capped by subdued physical demand, with high-grade nickel pig iron trading remaining quiet, downstream restocking muted, and nickel ore prices continuing to soften amid ample inventories and persistent supply availability.

Nickel traded around $16,500 per tonne, hovering near its lowest level since late December, as expectations of higher Indonesian supply continued to weigh on market sentiment. Investors remained focused on reports that Indonesia is considering raising its 2026 mining quota to around 360 million tonnes from roughly 260 million tonnes, reversing earlier production curbs that had lifted prices at the start of the year and reviving concerns over global oversupply. The bearish outlook was further reinforced by Nickel Industries' plans to ramp up production at its new Excelsior Nickel Cobalt HPAL plant while expanding downstream processing capacity through additional HPAL investments, supporting expectations of higher future nickel output. Meanwhile, elevated LME and SHFE nickel inventories continued to signal ample refined metal supply, limiting any sustained price recovery.