2026.01.0815:24:43UTC+00Nickel Plunges from Over 2-Year High

Nickel futures experienced a decline to $17,100 per tonne, retreating from their substantial peak of $18,875 reached on January 6th. This shift occurred as the market reevaluated the extent of output reductions proposed by Indonesia, the leading nickel producer. Initially, Jakarta suggested a 34% cut in nickel production in its 2026 budget, responding to concerns about potential oversupply and reports from miners about declining ore quality. However, the Indonesian government did not provide specifics on mining quotas in its recent briefing, which tempered confidence in these earlier commitments. Despite public strategies aimed at constraining production, prolonged excess supply has caused nickel futures to underperform compared to other base metals. Russia's Nornickel has even increased its surplus forecast for next year to 275,000 tonnes, notwithstanding signals from Indonesia about reduced output. Additionally, inventories at the London Metal Exchange expanded by over 93,000 tonnes, reaching 255,000 during the previous year. On the demand side, while global stainless steel purchase levels were subdued, the increasing use of nickel in electric vehicles helped offset some of this decline.