FX.co ★ Nickel Bounces from Over 4-Year Low

Nickel futures have climbed to the $15,500 per tonne level, bouncing back from the over four-year low of $14,150 reached on April 8th. This recovery aligns with a modest uptick in major base metals as global manufacturing demand is reassessed. Initially, concerns emerged when the US presidential administration announced aggressive tariffs targeting its major trade partners, aiming to address the trade deficit. This led to a selloff in base metals. However, the US later postponed the implementation of most of these levies, easing market tensions. Additionally, production forecasts from Indonesia indicate reduced output, alleviating fears of oversupply that have suppressed prices since the beginning of the year. Jakarta is contemplating a reduction in mining quotas by 120 million tons this year, after its 2020 ban on nickel ore exports prompted China to establish over 40 smelters in Indonesia, thereby expanding global capacity. As a result, inventories at the London Metal Exchange (LME) have increased by 30% so far this year, reaching 200,000 tonnes.