Nickel futures fell below $17,200 per tonne in March, extending their recent decline and tracking a broader pullback across industrial metals as escalating tensions in the Middle East reinforced risk-off sentiment in manufacturing markets. The surge in Brent crude and a stronger US dollar further pressured industrial commodities, prompting investors to reduce exposure to cyclical metals.
On the supply side, Indonesian refiners, which source roughly 75% of their sulfur requirements from the Middle East, face rising input costs and the risk of production cuts if shipping disruptions persist, potentially tightening feedstock availability and straining operations. On the demand side, Chinese steel mills have raised tender prices for high-grade NPI, signaling resilient demand that could help limit further downside in nickel prices.
At the same time, Indonesia’s 2026 ore production quota of 260–270 million wet metric tons will restrict full utilization of the country’s 2.7 million ton RKEF and HPAL capacity, with processing utilization expected to decline to 70–75% this year.
