Nickel prices fell during Monday trading amid ongoing concerns about rising global supply, while markets also monitored moves in the US dollar following remarks by Federal Reserve Chairman Jerome Powell, who hinted at an upcoming rate cut.
While base prices remain stable for now, nickel continues to show general weakness, keeping stainless steel surcharges at limited levels. Although prices have moved sideways in recent months, the longer-term multi-year trend still points downward.
At the same time, nickel inventories remain extremely high. Indonesia has maintained strong output, with nickel surpassing coal to become the country’s largest export in 2025. However, local demand there has already peaked, forcing some smelters to temporarily suspend operations amid low prices.
Although any slowdown in Indonesian supply could offer some support, the large global surplus persists, meaning smelters would need to cut production for an extended period before prices see a meaningful recovery.
Nickel stocks on the London Metal Exchange have risen by about 40,000 tons since the start of the year to reach 195,000 tons, driven by strong refining capacity from Chinese companies operating in Indonesia. Despite attempts to curb supply, overall market sentiment remains cautious, with any recovery still dependent on a major rebound in end-user demand.
Nickel market in Indonesia faces persistent surplus
Indonesia’s nickel sector remains under pressure, as government-set output quotas have exceeded actual demand, reinforcing the supply glut. Prices of nickel ore used in pyrometallurgy (thermal smelting) have declined, while nickel ore used in hydrometallurgy (wet smelting) has remained stable. High-grade ferronickel prices have also stayed steady, but smelter profit margins remain limited. Policymakers are considering potential interventions, but abundant supply and weak demand will likely cap any near-term price gains.
Chinese nickel market shows some resilience despite surplus
In China, nickel and stainless steel markets have displayed some resilience, even as overall demand remains weak and supply remains abundant. Government efforts to curb excess industrial capacity, along with expected seasonal changes in Philippine mining, may influence supply and pricing trends in the coming months.
Outlook
Markets are closely watching US monetary policy, Chinese stimulus measures, and seasonal shifts in Indonesian supply as potential factors driving nickel prices in the near term.
The dollar index rose by 0.2% at 15:24 GMT to 97.8 points, with a high of 98.0 and a low of 97.7.
As for trading, spot nickel contracts fell by 1.5% at 15:25 GMT to 14,960 dollars per ton.
