FX.co ★ Nickel Rises Toward 5-Month High

Nickel futures experienced an increase, surpassing $16,500 per tonne in March, marking their highest point in five months. Earlier this year, nickel prices had dipped to near their lowest in nearly four years, largely due to Indonesia's actions aimed at controlling oversupply. The Indonesian government has contemplated slashing nickel mining quotas by 120 million tons by 2025, a move that could reduce the global supply by 35% compared to current levels. However, the hesitance among buyers to initiate a price rebound suggests a persistent oversupply of nickel, as inventories in London Metal Exchange (LME) warehouses have more than doubled from the previous year, reaching almost 200,000 tons. This situation is amplified by the proliferation of Chinese smelting projects in Indonesia following the nation's 2020 ban on nickel ore exports. As of September, Indonesia was home to 44 nickel smelting operations, a significant increase from just four a decade ago. Meanwhile, manufacturing demand, as indicated by Chinese Purchasing Managers' Indices (PMIs), showed growth in February, leading to speculation that manufacturing activity may recover in the current year.