Nickel Extends Gains

Nickel traded around $16,000 per tonne, extending its rebound amid short-covering and prospects of coordinated production cuts in Indonesia. Major Chinese producers are expected to discuss output cuts, raising hopes of tighter supply after an earlier attempt in August failed. However, the broader outlook remains weighed down by persistent oversupply, as Indonesian nickel supply continues to expand despite tighter mining quotas. The International Nickel Study Group projected a 19,000-tonne global surplus in 2026, reversing its previous forecast of a 32,000-tonne deficit, with the surplus expected to widen to 70,000 tonnes in 2027. Additionally, slower-than-expected growth in battery demand, partly due to competition from lithium iron phosphate chemistries, adds to concerns that supply growth will continue to outpace consumption. The rebound's sustainability will depend on whether proposed production cuts translate into meaningful reductions in actual output.