Nickel hovered near $16,000 per tonne, its lowest level since December 2025, after Indonesia cut benchmark prices for low-grade nickel ore. The revised pricing formula almost halves the cost of 1.2% nickel ore, improving the economics of high-pressure acid leach (HPAL) projects, just as substantial new capacity is set to ramp up this year and next, potentially adding to global supply. At the same time, firmer expectations of further US interest rate hikes have strengthened the dollar and pushed up Treasury yields, putting broad pressure on base metals.
Looking further ahead, anticipated US approvals for deep-sea mining could eventually unlock additional supply of nickel, cobalt, copper and manganese. In the near term, however, drought conditions in Indonesia have forced Nickel Industries’ Excelsior Nickel Cobalt plant to operate at only 30% of nameplate capacity, while production at the Indonesia Morowali Industrial Park could decline by 30% to 40% if new water sources are not secured, constraining immediate supply growth.
