Nickel Falls to 2-Month Low

Nickel traded around $16,550 per tonne, falling to its lowest level since July, as prospects for increased Indonesian supply weighed on prices. Indonesia’s Weda Bay Nickel, one of the world’s largest nickel mining operations, restarted mining after four months of care and maintenance, potentially bringing additional ore supply back to the market, although the ramp-up will be gradual and production volumes for the remainder of the year remain uncertain. Additionally, Indonesia’s 2026 mining quota was set at 250–260 million wet tonnes, below 379 million tonnes in 2025, limiting the scope for higher Indonesian ore supply. At the same time, the US 10-year yield approached 5%, while the dollar index climbed above 99, weighing on base metals broadly. Meanwhile, cuts to Chinese HPAL and MHP output have tightened intermediate supply, providing a countervailing factor to the Indonesian supply outlook.

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.