FX.co ★ Nickel Futures Rally to Over 2-Year High

Nickel futures have surged past $18,500 per tonne in January, reaching their highest point in over two years. This increase is driven by strong investor sentiment and renewed supply concerns stemming from Indonesia, the leading producer. Since mid-December, prices have jumped substantially amid intensified financial inflows within metals markets, especially in China, propelling momentum in nickel futures on the London and Shanghai exchanges. Investor sentiment has been buoyed by expectations that Indonesia may impose stricter supply controls in 2026. The Indonesian government has hinted at plans to reduce the nickel mining quota for that year and enforce stricter penalties on miners who violate forestry permits, sparking fears of possible disruptions in output. Despite this rally, the nickel market continues to face a structural oversupply, with inventories on the London Metal Exchange (LME) reaching multi-year highs. Analysts note that the recent price gains are more attributable to financial flows and policy risk premiums rather than a genuine improvement in supply-demand fundamentals.