Nickel Futures Hit Over 1-Month Low

Nickel futures slipped to around $17,000 per tonne, reversing gains from the previous session and marking the lowest level in over a month, as traders booked profits following a recent rally. Prices had climbed toward $18,000 last week following Indonesia’s sharp output cut at PT Weda Bay Nickel, the world’s largest nickel mine in Indonesia, which contributed to a recent surge amid supply-tightening expectations. However, some investors began reassessing the scale and timing of the production restrictions, while speculators squared positions, contributing to the pullback. Additional pressure came from broader base-metals weakness, with copper and aluminum also sliding amid softer global equities and US labor data that dampened hopes of near-term interest rate cuts. Meanwhile, seasonal demand in China ahead of the Lunar New Year slowed physical trading activity, further limiting market support. Market participants continue to watch for supply signals.

Nickel futures surged to $17,900 per tonne in February, regaining ground after a speculative rally lifted futures to the 19-month high of $18,785 earlier this year, amid the outlook of tight supply. The Indonesian government announced that the quotas fore nickel ore production would be cut by more than 100 million tonnes from the previous year to a cap of 270 million in 2026. This followed statements from major miners in the Weda Bay area that production will see aggressive pullbacks, consolidating Jakarta's move and erasing chances that mining giants would still negotiate higher quotas due to the historical ambiguity on caps to wet tons. Previously, Indonesian authorities had also signaled they would crack down on illegal mining activities, magnifying the impact of lower supply. Elsewhere, prices continued to be supported by commodity funds as nickel's utility in datacenters and electrification technologies made it a proxy to bets on AI that have gained speculative ground.

Nickel futures rose to around $17,900 per tonne, following Indonesia's confirmation of sharp output cuts for 2026. The country has approved nickel ore quotas of 260–270 million tons, well below last year’s 379 million tons, aiming to curb the persistent surplus and support prices. Quotas below 270 million tons remain under last year’s production level, with issuance expected to complete by March. Additionally, Chinese smelters operating in Central Sulawesi have reportedly failed to submit mandatory investment activity reports. These incomplete filings mean authorities are unable to fully monitor production. Meanwhile, the Philippines’ DMCI Mining Corporation posted record 2.0 million WMT nickel ore output in 2025, targeting 3 million WMT in 2026, with export volumes expected to continue. This Philippine supply provides volumes available for regional markets, including China.