Nickel traded around $16,400 per tonne, extending its recent gains as concerns over supply disruptions in Indonesia intensified. Smelters at the Morowali Industrial Park are set to cut nickel pig iron production because of an El Niño-driven water shortage, with output losses potentially reaching about 100,000 tonnes. This has heightened fears of tighter supply and helped cap further downside in prices.
Nonetheless, the near-term outlook remains constrained by weak Chinese downstream demand. Procurement of nickel salts and spot stockpiling have been subdued, while some precursor producers have scaled back operating rates. At the same time, Indonesia’s revised nickel ore benchmark pricing formula sharply lowered the HPM for low-grade 1.2% nickel ore to around $24.89 per wet tonne—almost half the previous level. This may cut feedstock costs for HPAL plants and incentivize greater use of low-grade ore reserves.
Elevated inventories across the nickel supply chain continue to signal ongoing destocking, limiting the potential for a sustained price recovery.
