FX.co ★ Nickel Extends Gains

Nickel traded near $15,950 per tonne, extending its rebound on the back of short-covering and growing expectations of coordinated production cuts in Indonesia. Major Chinese producers are reportedly set to revisit potential output reductions at their Indonesian operations, reviving hopes for tighter supply after similar talks in August failed to yield action.

Nonetheless, the broader outlook remains pressured by persistent oversupply, even as Indonesia enforces stricter mining quotas. The International Nickel Study Group now projects a 19,000-tonne global surplus in 2026, reversing its earlier forecast of a 32,000-tonne deficit. The surplus is seen widening further to 70,000 tonnes in 2027.

Market sentiment is also dampened by slower-than-expected growth in battery demand, partly reflecting increased competition from lithium iron phosphate chemistries. These trends reinforce concerns that supply growth will continue to outstrip consumption. The durability of the current price rebound will hinge on whether the proposed production cuts are implemented and translate into substantial reductions in actual output.