Nickel Extends Gains on Indonesia Supply Cut

2026-09-22 06:56 By Erika Ordonez 1 min. read

Nickel traded around $16,400 per tonne, extending gains as concerns over supply disruptions in Indonesia emerged.

Smelters at the Morowali Industrial Park will cut nickel pig iron production due to an El Niño-driven water shortage, with the affected output potentially reaching around 100,000 tonnes, pointing to tighter supply and helping limit further downside.

However, the near-term outlook remained limited by weak Chinese downstream demand, as nickel salt procurement and spot stockpiling stayed subdued while some precursor producers lowered operating rates.

Additionally, Indonesia’s revised nickel ore benchmark price formula significantly reduced the HPM for low-grade 1.2% nickel ore to around $24.89 per wet tonne, nearly half the previous level, which could lower feedstock costs for HPAL plants and encourage greater use of low-grade reserves.

Elevated inventories across the nickel supply chain also pointed to continued destocking, limiting room for a sustained recovery.



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Nickel Extends Gains on Indonesia Supply Cut
Nickel traded around $16,400 per tonne, extending gains as concerns over supply disruptions in Indonesia emerged. Smelters at the Morowali Industrial Park will cut nickel pig iron production due to an El Niño-driven water shortage, with the affected output potentially reaching around 100,000 tonnes, pointing to tighter supply and helping limit further downside. However, the near-term outlook remained limited by weak Chinese downstream demand, as nickel salt procurement and spot stockpiling stayed subdued while some precursor producers lowered operating rates. Additionally, Indonesia’s revised nickel ore benchmark price formula significantly reduced the HPM for low-grade 1.2% nickel ore to around $24.89 per wet tonne, nearly half the previous level, which could lower feedstock costs for HPAL plants and encourage greater use of low-grade reserves. Elevated inventories across the nickel supply chain also pointed to continued destocking, limiting room for a sustained recovery.
2026-09-22
Nickel Rebounds From 8-Month Low
Nickel traded around $16,400 per tonne, rebounding from its lowest level in eight months as the recent decline attracted some buying interest. The move marked a technical recovery following the recent selloff. However, the near-term outlook remained constrained by weak Chinese downstream demand, with nickel salt procurement and spot stockpiling subdued while some precursor producers reduced operating rates. Additionally, Indonesia’s revised nickel ore benchmark price formula sharply lowered the HPM for low-grade 1.2% nickel ore to around $24.89 per wet tonne, nearly halving the previous level, which could reduce feedstock costs for HPAL plants and encourage greater use of low-grade reserves. High inventories across the nickel supply chain also pointed to ongoing destocking, limiting the scope for a sustained recovery despite the latest price rebound.
2026-09-17
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.
2026-09-16