Nickel Extends Decline to 8-Month Low

Nickel traded around $16,000 per tonne, falling to its lowest level since December 2025 as Indonesia cut benchmark prices for low-grade nickel ore. The revised pricing formula nearly halves the cost of 1.2% nickel ore, improving the economics of high-pressure acid leach (HPAL) plants, while significant new capacity is expected to ramp up this year and next, potentially adding to global supply. Additionally, stronger US rate-hike bets lifted the dollar and Treasury yields, weighing on base metals broadly. Over the longer term, expected US deep-sea mining permits could eventually pave the way for additional nickel, cobalt, copper and manganese supply. Meanwhile, drought conditions in Indonesia have constrained Nickel Industries' Excelsior Nickel Cobalt facility to 30% of nameplate capacity, while output at the Indonesia Morowali Industrial Park could fall 30% to 40% if new water sources are not secured, limiting near-term supply growth.

Nickel decreased to 16150.00 USD/T, the lowest since July 2026. Over the past 4 weeks, Nickel lost 3.55%, and in the last 12 months, it increased 4.6%.

Nickel traded around $16,320 per tonne, falling to its lowest level since July as stronger US rate hike bets lifted the dollar and Treasury yields, weighing on base metals broadly. US August producer prices came in above expectations, adding to rate hike bets that later climbed above 90%, while the US 10-year yield approached 5% and the dollar index climbed above 99, contributing to a broad LME base-metals selloff. Meanwhile, worsening drought conditions in Indonesia tightened the supply outlook, with Nickel Industries limiting the ramp-up of its Excelsior Nickel Cobalt facility to 30% of nameplate capacity due to water shortages. The disruption adds to concerns over output at the Indonesia Morowali Industrial Park, which could fall by 30% to 40% if new water sources are not secured. Additionally, Indonesia’s 2026 mining quota remains well below last year’s level, while Chinese HPAL and MHP output cuts and recent inventory drawdowns offer some offset to the downside.