Nickel Hits 22-month High

Nickel futures climbed back above $18,800 per ton, recovering from a near four-week low of $18,555 on May 18, after reports of additional output reductions in Indonesia, the world’s largest producer. According to Shanghai Metals Market, around 10% to 15% of high-grade nickel pig iron capacity at the Weda Bay Industrial Park is set to undergo rotational maintenance in the coming months. The report also noted that some NPI production used in stainless steel has already been reduced since March and April due to weaker ore availability and elevated costs, while shifting power allocation toward new aluminium projects has further tightened supply conditions. Indonesia has lowered nickel ore mining quotas this year in an effort to support prices, leading to raw material shortages and forcing cutbacks at local smelters. The country produces more than half of global nickel output, supported by significant Chinese investment.

Nickel futures traded around $18,500 per tonne, extending losses toward a one-month low as softer cost-side signals and profit-taking continued to weigh on sentiment. Declining nickel ore prices in the Philippines, alongside easing nickel sulfate prices, reduced near-term support for the market and reinforced expectations of lower production costs across parts of the nickel supply chain. Market sentiment was also pressured by subdued downstream demand conditions, with procurement activity in China remaining largely essential-driven and traders pointing to a lack of fresh catalysts following the recent rally. Broader sentiment across industrial metals also stayed cautious amid mixed macro conditions. Still, longer-term supply concerns tied to tighter Indonesian mining quotas and rising processing costs continued to provide underlying support to the broader nickel outlook.

Nickel futures traded around $18,900 per tonne, pulling back from a recent over two-year high near $19,600, as profit-taking emerged after the recent sharp rally. Traders began locking in gains as the market digested the speed of the move rather than any deterioration in underlying fundamentals. Broader industrial metals also showed mixed price action, reflecting a pause in risk appetite after a strong run across the base metals complex. The earlier rally had been driven by tightening supply narratives and Indonesia-linked policy signals, including expectations of higher export-related costs and windfall taxes that reinforced a higher cost floor for the nickel industry. Elevated official reference prices and strong momentum in refined nickel contracts also pulled the broader complex higher. Meanwhile, nickel remains underpinned by Indonesia’s structurally tight supply backdrop, alongside cooperation efforts with the Philippines on downstream processing and supply chains.