FX.co ★ Nickel Retreats on Persistent Oversupply

Nickel hovered around $15,900 per tonne, giving back recent gains as persistent global oversupply and muted demand kept prices under pressure. Indonesia’s rapid ramp-up in nickel production has ensured abundant supply, while weaker stainless steel demand and the broader adoption of lithium iron phosphate batteries have curbed consumption growth. The International Nickel Study Group projects that the global surplus will widen in 2027, underscoring a prolonged supply overhang. At the same time, reports of coordinated output cuts at Chinese-operated smelters in Indonesia have raised expectations of tighter supply, with producers said to be weighing a 50% reduction in mixed hydroxide precipitate (MHP) output and a 20% cut in nickel pig iron production. Although the exact scale and timing of these measures remain unclear, mounting losses among Indonesian MHP producers are increasing the incentive to reduce output, which could materially tighten supply if the proposed cuts are carried out.