Nickel Extends Gains

Nickel traded around $16,850 per tonne, extending gains from the previous session and tracking broader strength across industrial metals. Copper prices remained near fresh record highs, reinforcing the continued strength seen across the industrial metals sector. Battery-sector demand also showed signs of improvement, with recycled nickel sulphate production rising nearly 6% month-on-month in August, driven by stronger ternary cathode precursor demand and a relatively high share of high-nickel products. Meanwhile, elevated nickel inventories and subdued stainless steel demand continued to cap the upside, keeping gains in check despite the broader recovery across metals. Rising rate-hike expectations also weighed on dollar-priced commodities.

Nickel traded below $16,700 per tonne, remaining under pressure as elevated inventories and weak downstream demand weighed on prices. LME warehouse stocks were around 271,000 tonnes in early September, while soft stainless steel demand continued to weigh on nickel consumption. Indonesia’s 2026 nickel ore quota was cut to 260–270 million tonnes from 379 million in 2025, but Philippine ore imports reached 11.4 million tonnes in January-July, up from 6.82 million a year earlier, helping keep Indonesian smelters supplied and offsetting some of the impact of the lower quota. Moreover, stronger US jobs data lifted expectations for a September Fed rate hike, keeping higher yields and a stronger dollar as additional headwinds for nickel. Meanwhile, lower cobalt payables for Indonesian MHP are squeezing HPAL margins and could prompt higher-cost producers to reduce output, offering some medium-term supply support.

Nickel traded around $16,900 per tonne, rebounding from an over one-month low as potential production cuts at Indonesia’s largest nickel-processing hub raised concerns over a tightening supply outlook. Indonesia Morowali Industrial Park (IMIP) said El Niño-driven water shortages could reduce production by 30%-40% if new water sources are not secured, raising concerns over global availability. Some Chinese-backed nickel producers are also considering coordinated output cuts of around 30% at HPAL plants amid weak prices and rising operating costs, although no agreement has been reached. Indonesia’s tighter 2026 mining quota further points to lower ore availability, with the limit set at around 260-270 million tonnes vs 379 million tonnes in 2025. Meanwhile, elevated inventories and weak Chinese demand continued to weigh on prices, while higher imports of Philippine nickel ore into Indonesia could help offset tighter domestic supply.