Nickel Retreats on Persistent Oversupply

Nickel traded around $15,900 per tonne, reversing recent gains as persistent global oversupply and subdued demand continued to constrain prices. Indonesia’s rapid expansion of nickel production has kept supply ample, while weaker stainless steel demand and the growing use of lithium iron phosphate batteries have limited consumption growth. The International Nickel Study Group expects the global surplus to widen in 2027, reinforcing the longer-term supply overhang. Meanwhile, reports of coordinated production cuts at Chinese-operated Indonesian smelters have raised hopes of tighter supply, with producers reportedly considering halving mixed hydroxide precipitate (MHP) output and cutting nickel pig iron production by 20%. Although the scale and timing of the measures remain uncertain, losses among Indonesian MHP producers strengthen the incentive to curb output, potentially tightening supply if the cuts are implemented.