Nickel Futures Near One-Month High

Nickel futures traded above $19,200 per tonne, extending gains to near a one-month high, as tightening supply conditions supported prices. The market was buoyed by declining LME nickel inventories and fresh mining disruptions, including Zimbabwe's restriction on nickel exports, which reinforced expectations of tighter global supply. Further support came from persistent constraints across the nickel supply chain. Market participants continued to monitor tight ore quotas in Indonesia and limited mixed hydroxide precipitate (MHP) availability, while some producers maintained output cuts amid elevated costs, limiting supply growth. Meanwhile, demand remained relatively resilient. China's manufacturing PMI held at the expansion threshold of 50.0 in May, while expectations for continued growth in the electric vehicle sector supported the outlook for nickel consumption.

Nickel futures climbed back above $19,000 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.