Nickel Prices Surge Over 2% Daily, Reaching Highest Level Since May Amid Supply Cut Speculation

London | EcoPulse24

Nickel prices saw robust gains in trading, with benchmark prices reaching $15,974 per ton - an increase of $314, or 2.01% daily - and up 7.39% monthly, supported by market repricing on expectations of tighter global supply.

This performance came after UK nickel futures jumped to around $15,600 per ton, their highest since May, after hitting a four-year low of $14,350 on December 16. Investors have begun reassessing the prevailing view of market oversupply.

Indonesia, the world’s largest nickel producer, has proposed a 34% output cut in its 2026 budget to address oversupply concerns, alongside warnings from mining firms about declining ore quality. This move follows Jakarta’s nickel ore export ban in 2020, which had previously led to overexpansion in the sector.

Despite such efforts, expectations of ample supply continue to pressure nickel compared to other base metals. Russian miner Nornickel recently raised its forecast for next year’s market surplus to around 275,000 tons.

London Metal Exchange (LME) nickel inventories have also continued to rise, adding over 90,000 tons since the start of the year and reaching 254,600 tons by late December, reflecting ongoing supply pressures despite the recent price rebound.

On the demand side, global stainless steel purchases remain weak, but this has been partially offset by increased nickel use in electric vehicle (EV) batteries, supporting long-term demand as the world shifts toward clean energy and e-mobility.

These developments indicate the nickel market is increasingly sensitive to changes in Indonesian production policy and supply-demand balances, with the medium-term trend hinging on the implementation of output cut plans and the market’s ability to absorb elevated inventories.

Frequently Asked Questions about Nickel (FAQ)

What is nickel?
Nickel is a key industrial metal known for its high resistance to corrosion and heat. It is widely used in heavy industry and technology and is a critical component in global supply chains.

What are the main uses of nickel?
Nickel is primarily used in the production of stainless steel, as well as in electric vehicle batteries, high-performance alloys, electronics, and chemical equipment. This makes it a strategic metal in the transition to clean energy.

Who are the world’s top nickel producers and consumers?
Indonesia is the leading global nickel producer, followed by the Philippines, Russia, Canada, and Australia. China is the largest consumer, driven by its steel and battery industries, with the US, EU, and Japan also significant consumers.