FX.co ★ Nickel Remains in Tight Range

Nickel futures have declined towards the $15,000 per tonne level, remaining within a multi-week range and near the over four-year low of $14,150 observed in April. This trend continues as concerns about oversupply linger, even as Indonesia advances its agenda for stricter Environmental, Social, and Governance (ESG) standards. The introduction of Indonesia’s inaugural national ESG forum marks a strategic move towards more sustainable nickel production, aligning with stricter global environmental regulations. Although this development may restrict supply in the long run, immediate output levels remain robust, with Indonesia maintaining its strong market position. Earlier in the year, the Indonesian government reduced nickel mining quotas by 120 million tonnes, bringing them down to 150 million tonnes, effectively cutting global supply by approximately 35%. This occurred amid a rise in Chinese-backed smelters after Indonesia's 2020 ban on nickel ore exports. Currently, Indonesia is home to 44 smelters, a significant increase from just four a decade ago. Furthermore, uncertainties surrounding US tariffs have compounded the pressure on base metals.