Nickel Falls Near 1-Month Low

Nickel traded around $16,700 per tonne in August, retreating to its lowest level since mid-July as expectations of improved Indonesian supply weighed on prices. The decline followed reports that Indonesia may further relax supplementary RKAB nickel ore quotas, with a major miner expected to receive additional allocations that would significantly increase its 2026 allocation and support downstream smelter feedstock availability in the second half of the year. Prices also came under pressure as easing concerns over potential disruptions in the Strait of Hormuz reduced sulfur costs, lowering input cost pressures for nickel processing. Meanwhile, expectations that Indonesia will continue to manage nickel ore supply through RKAB quotas, along with elevated production costs, continued to provide some support.

Nickel traded above $17,300 per tonne, remaining near its highest level in over a month and up more than 5% during July, as supply concerns in Indonesia supported prices. Indonesian smelters operated by Tsingshan Holding Group, the world's largest nickel producer, suspended some export loadings of mixed hydroxide precipitate and disrupted exports of other nickel products as authorities increased inspections over possible rare-earth content in shipments. The delays raised concerns over potential supply disruptions in the world's largest nickel-producing country, although the government moved to resolve regulatory bottlenecks by coordinating with industry participants and government agencies. Additionally, expectations of tighter Indonesian production controls and higher sulfur costs continued to support prices.

Nickel fell to around $17,000 per tonne in late July, retreating from an over one-month high near $17,300, as investors locked in profits following a strong rally in recent weeks. Prices also came under pressure after Indonesia moved to resolve regulatory bottlenecks that had delayed exports of some nickel products, easing concerns over near-term supply disruptions. The move followed reports that the government is working to address uncertainty over the allowable rare-earth content in mineral shipments, which had disrupted exports of nickel products and alumina. Still, losses were limited by signs of tighter market conditions, with LME nickel inventories declining for six consecutive sessions, while support from Indonesian mining policies and slower nickel ore shipments from the Philippines had helped lift prices.