Nickel Extends Decline Amid Ample Supply

Nickel traded around $16,150 per tonne, extending losses as ample availability continued to weigh on prices. Philippine ore shipments have helped offset tighter domestic ore availability in Indonesia, partly easing the impact of the country’s lower 2026 nickel ore quota. Additionally, LME on-warrant inventories rose to 278,898 tonnes by September 24 from an August low of 264,444 tonnes, reinforcing the picture of ample supply. Meanwhile, Indonesia’s 2026 nickel ore quota remains below the roughly 315 million tonnes needed to operate its processing capacity at full rates. Production cuts at the Morowali Industrial Park due to water shortages could also affect around 100,000 tonnes of nickel pig iron output, potentially tightening supply.

Nickel traded around $16,550 per tonne, 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, concerns persisted that Indonesia’s production curbs may not be enough to prevent a surplus, as higher quota allocations for some operators and rising imports of Philippine nickel ore have helped processors adjust to lower domestic ore availability. The near-term outlook was also constrained by weak Chinese downstream demand, while elevated exchange inventories continued to weigh on prices, with LME and Shanghai Exchange stocks reaching around 478,000 tonnes, equivalent to roughly seven weeks of global consumption.

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.